LIBRARY 


UNIVERSITY  OF  CALIFORNIA, 

Deceived         jYc~U~  , 

Accession  No.  (}  I  _J  J  5  ....•   Class  No. 


FORD  EXCHANGE. 


i*.  6, 


1 


SPEECHES 


ON 


COMMERCIAL,    FINANCIAL   AND    OTHER 
SUBJECTS. 


BY 


ELIJAH    WARD. 


NEW     YORK: 

Copyright.  1877.  l>y 


G.    W.    Carleton  &   Co.,  Publishers. 


LONDON:     S.  LOW  &  CO. 
MDCCCLXXVII. 


CONTENTS. 


Ship-Canal,  connecting  the  Atlantic  and  Pacific  Oceans  :  its  Value  to  the 
Commerce  of  the  United  States  and  other  Nations.  House  of  Repre- 
sentatives, February  15,  1859 11 

A  Just  Bankrupt  Law  :  its  Present  Necessity,  and  Importance  as  a  Perma- 
nent Act.     House  of  Representatives,  June  3,  1862 34 

A  Just  Bankrupt  Law :  its  Present  Necessity,  and  Importance  as  a  Perma- 
nent Act.     House  of  Representatives,  June  3,  1864 54 

Our  Commercial  Relations  with   the  British  "North  American  Provinces. 

House  of  Representatives,  May  18,  1864 59 

. 
Our  Commercial  Relations  with  the  British  North  American  Provinces. 

House  of  Representatives,  May  26,  1864 88 

The  Tariff  and  the  True  Principles  of  Taxation.     House  of  Representatives, 
June  2,  1864 100 

The  Treaty  with  the  Hawaiian  Islands :  its  Relations  to  our  National  Com- 
merce.    House  of  Representatives,  March  4, 1876 113 

Our  Commercial  Relations  with  Canada.     House  of  Representatives,  May 
18,  1876 124 

Our  Commercial  Relations  with  Canada  and  the  Extension  of  Markets  for 
our  Productions.     House  of  Representatives,  February  1,  1877 157 

The  Financial  Condition  of  the  Nation.     House  of  Representatives,  January 
15,  1863 183 

The  Financial  Problem  :  how  shall  it  be  solved  ?    House  of  Representatives, 

January  29,  1876 205 

The  Distribution  of  the  Geneva  Award.     House  of  Representatives,  May  23, 
1876..  .  226 


riii  CONTENTS. 

PACK 

Nationality  of  the  Democratic  Party.     House  of  Representatives,  March  31, 

1858 236 

The  True  Policy  of  the  Government  as  to  the  Conduct  of  the  War,  with  a 
View  to  the  Preservation  of  the  Union.  House  of  Representatives, 
January  9,  1865 , 256 

The  Best  Policy  toward  the  Southern  States.     Letter  to  the  New  York 

World,  September  6,  1875 273 

The  Shipping  Act  relating  to  Merchant  Seamen.     House  of  Representatives, 

June  1,  1876 277 

A  Coinage  Department  at  the  Assay  Office  in  New  York :  its  Utility  to  Com- 
merce, and  Importance  on  Grounds  of  Local  and  National  Justice  and 
Economy.  House  of  Representatives,  February  1,  1877 285 

The  Questions  of  the  Times.  At  a  Meeting  Ratifying  the  Nomination  of  the 
Hon.  Elijah  Ward  for  Election  to  the  Forty-fifth  Congress.  November 
4,  1876 293 

A  Free  Canal  Policy  :  the  best  Guarantee  for  the  Preservation  and  Increase 
of  our  Inland  Commerce..  .302 


PREFACE. 


THE  speeches  selected  from  those  of  the  Hon.  Elijah  Ward, 
and  presented  in  this  volume,  are  laid  before  the  public  because 
they  refer  chiefly  to  measures  of  immediate  and  practical 
moment  in  the  national  commerce  and  finances,  but  yet  remaining 
unaccomplished.  Much  labor  has  been  spent  with  a  candid  and 
impartial  spirit  in  acquiring  the  information  they  contain,  and 
it  would  be  difficult  of  access,  and  thus  of  comparatively  little 
use,  unless  collected  and  concentrated.  The  subjects  will  con- 
tinue to  demand  more  and  more  the  attention  of  American 
statesmen,  until  they  are  finally  settled.  They  include  the  much 
needed  ship-canal  to  connect  the  Atlantic  and  Pacific  Oceans,  an 
extension  of  our  commerce,  especially  of  the  markets  for  our 
manufactures  and  agricultural  productions,  through  an  American 
or  continental  system  of  trade  with  Canada,  Mexico,  Cuba,  and 
other  countries,  revenue  reform  and  the  restoration  of  our  mer- 
cantile marine  on  the  ocean,  the  necessity  of  a  just,  uniform,  and 
permanent  bankrupt  law,  the  importance  of  conferring  the  right 
of  coinage  on  the  Assay  Office  in  New  York,  a  free  canal  policy 
in  the  State  of  New  York  as  essential  to  the  preservation  of  her 
inland  commerce  and  valuable  to  the  nation,  a  safe  and  gradual 
return  to  a  sound  currency,  redeemable  in  coin,  and  the  renewal 
of  concord  and  prosperity  in  the  Southern  States. 

On  the  whole,  the  speeches  refer  more  or  less  directly  to  com- 
merce at  home  and  abroad  as  the  best  means  of  stimulating  pro- 
duction and  increasing  the  employment  and  comfort  of  the  people 
throughout  the  Union.  For  many  years  these  material  interests 
have  been  conspicuously  neglected  in  the  national  Legislature, 
and  it  was  the  object  of  Mr.  Ward  to  present  those  views  which 
he  believed  to  be  true  in  regard  to  them  without  yielding  to  the 
prevalent  prejudices  or  supineness  of  the  times. 


X  PREFACE. 

More  than  any  other  single  sentiment  pervading  the  speeches, 
is  confidence  in  the  belief  that  "  all  legitimate  interests  are  har- 
monious." Mr.  Ward  holds  that  the  Monroe  doctrine,  however 
gratifying  to  an  honorable  national  pride,  is  little  more  than  a 
barren  ideality,  unless,  in  an  enlightened  self-interest,  we  asso- 
ciate with  it  a  performance  of  its  obligations,  including  a  friendly 
care  for  the  commercial  prosperity  of  the  States  we  have  so  far 
taken  under  our  protection,  by  extending  the  exchanges  of  in- 
dustry with  our  neighbors  on  the  north  and  south,  thus  promoting 
such  a  system  of  intercourse  and  of  benefits  reciprocally  given 
and  received  as  will  tend  to  prevent  those  wars  and  chronic 
apprehensions  which  in  the  Old  World  cause  the  constant  main- 
tenance of  large  standing  armies,  with  frequent  loss  of  life  on  a 
scale  of  stupendous  magnitude,  and  at  all  times  the  infliction  of 
heavy  burdens  upon  the  people. 


SPEECHES 

OP   THE 

HOIST.    ELIJAH 


SHIP-CANAL    CONNECTING    THE    ATLANTIC 
AND  PACIFIC   OCEANS: 


ITS 


VALUE    TO    THE    COMMERCE   OF   THE   UNITED   STATES 
AND   OTHER  NATIONS. 


HOUSE  OF  REPRESENTATIVES,  February  15, 1859. 


At  the  present  time  no  one  public  work,  of  so  much  value 
to  the  commerce  of  the  world  as  the  union  of  the  Atlantic  and 
Pacific  Oceans  by  a  ship-canal  through  some  part  of  the  Isthmus 
of  Darien,  remains  uncompleted.  Nearly  twenty  years  have  now 
elapsed  since  Mr.  Ward  directed  the  thoughts  of  Congress  to  it. 
Within  that  period  several  additional  surveys  have  been  made. 
The  important  international  enterprise  continually  receives  in  an 
increased  degree  the  attention  of  scientific  and  practical  states- 
men in  all  parts  of  the  world,  and  time  demonstrates  more  and 
more  clearly  the  accuracy  and  importance  of  the  facts  and 
opinions  expressed  in  the  following  speech : 

MR.  CHAIRMAN  :  Having  the  honor  to  represent  in  this 
honorable  body  a  constituency  vitally  interested  in  the 
progress  of  commerce,  an  element  which  has  enabled  our 
country  to  attain  a  high  rank  among  the  nations  of  the 
world,  and  to  which  we  must  be  chiefly  indebted  in  the 
future  for  its  further  growth  and  increased  power,  I  feel 
a  deep  interest  in  all  subjects  which  seem  likely  to  aid  in 
the  development  of  our  commercial  greatness,  and  in 
maintaining  the  supremacy  we  are  rapidly  acquiring. 


12  SHIP-CANAL. 

Our  vast  extent  of  territory,  its  fertility,  mineral  and 
other  resources,  the  energy  of  the  people,  and  the  great 
amount  of  capital  employed,  are  powerful  levers  in 
advancing  the  prosperity  of  the  country  ;  but  the  History 
of  the  past  demonstrates  that  no  one  element  has  had  so 
great  an  influence  in  the  extension  of  commerce,  and 
contributed  so  largely  to  our  national  wealth,  as  increased 
facilities  for  annihilating  space  and  time  by  means  of 
railroads  and  canal  communications.  The  utility  and 
importance  of  these  modes  of  transportation  have  been 
fully  tested.  Railroads  with  cars  propelled  by  steam 
are  of  comparatively  recent  origin,  having  been  first  used 
not  more  than  twenty-seven  years  ago.  Within  that 
period  England  has  expended  .£300,000,000  sterling,  and 
the  United  States  $1,070,000,000,  in  constructing  rail- 
roads. Canals  attracted  the  attention  of  the  ancients. 
The  best  authenticated  accounts  of  ancient  Egypt  repre- 
sent "that  country  as  intersected  by  canals  conveying 
the  waters  of  the  Nile  to  the  more  distant  parts  of  the 
country,  partly  for  the  purposes  of  irrigation  and  partly 
for  navigation.  The  efforts  made  by  the  old  Egyptian 
monarchs  and  by  the  Ptolemies  to  construct  a  canal 
between  the  Red  Sea  and  the  Nile  are  well  known,  and 
evince  the  high  sense  which  they  entertained  of  the  im- 
portance of  this  species  of  communication."  This  work 
was  intended  for  a  ship-canal  to  connect  the  Red  Sea 
with  the  Mediterranean.  The  same  locality  is  now 
attracting  public  attention,  and  the  route  has  been  ex- 
amined and  surveyed  and  found  to  present  no  difficulty 
that  cannot  be  removed.  The  French  projectors  of  the 
Suez  Canal  contemplate  its  reopening,  or  the  construction 
of  a  parallel  line  connecting  the  two  seas,  which,  if  car- 
ried into  effect,  would  be  of  great  benefit  to  commerce. 
Canals  have  been  constructed  in  Italy,  France,  Holland, 
Denmark,  Sweden,  England,  and  other  countries ;  but  it 
was  reserved  for  the  State  of  New  York  to  excel  them 
all  in  connecting  the  waters  of  the  Hudson  with  Lake 
Erie,  by  means  of  the  Erie  Canal. 

My  associations  with  mercantile  men,  and  residence  in 
the  commercial  metropolis,  have  long  since  induced  me  to 
examine  with  the  greatest  attention  projects  that  pro- 


SHIP-CANAL.  13 

posed  to  develop  intercommunication.  The  construction 
of  canals  in  the  several  States,  of  lines  of  railroads  lead- 
ing to  all  parts  of  the  country,  the  introduction  of  our 
steam  marine  and  the  many  lines  of  clipper  and  other 
sailing  ships,  induce  me  to  believe  that  much  more  may 
be  done  beneficially  in  this  direction.  Boston,  New  York, 
Philadelphia,  Baltimore,  Charleston,  and  the  other  sea-coast 
cities  and  towns,  as  well  as  those  in  the  interior,  attest 
the  benefits  of  railroads  and  canals,  interlinking  and 
binding  the  Union  by  ligaments  of  a  common  interest 
too  strong  to  be  severed.  Appreciating  the  advantages 
to  the  country  that  result  from  the  .home  and  foreign 
trade,  it  becomes  important  to  facilitate  that  trade  m 

(every  proper  manner. 
With  a  view  to  increase  commercial  intercourse,  by 
diminishing  the  travelling  distance  from  the  Atlantic  to 
the  Pacific  ports,  the  subject  of  a  ship-canal  is  assum- 
ing an  importance  commensurate  with  its  merits.  No 
project  of  higher  moment  or  greater  magnitude  has  been 
presented  to  the  country. 

"  When  in  1513  Yasco  Nunez  first  beheld,  from  the  heights  of 
Darien,  the  shores  of  the  Pacific,  its  near  proximity  to  the  Atlan- 
tic could  not  fail  to  render  evident  the  importance  of  a  water 
communication  between  the  two  oceans.  Long  and  vainly  did 
the  Spaniards  seek  for  a  natural  channel,  which  might  facilitate 
their  passage  to  the  Indies,  and  when  forced  to  abandon  all  hope 
in  its  existence,  they  continually  directed  their  attention  to  the 
best  means  of  opening  an  artificial  way.  The  great  utility  of 
such  an  undertaking  became  still  more  evident  towards  the  latter 
part  of  the  eighteenth  century,  which  witnessed  the  rising  im- 
portance of  Hindostan,  of  China,  and  of  the  islands  of  the  Indian 
Ocean,  as  well  as  the  discovery  of  Australia  and  the  numerous 
islands  of  the  Pacific.  The  length  of  time  required,  and  the 
danger  incurred,  in  doubling  the  two  tempestuous  capes,  by 
which  alone  the  passage  could  be  effected,  served  continually  to 
keep  attention  fixed  on  the  inestimable  advantages  which  would 
accrue  from  an  interoceanic  communication.  Various  points  of 
Central  America  were  therefore  surveyed,  and  plans  were  pro- 
posed for  executing  this  most  desirable  enterprise  ;  but  the  diffi- 
culties to  be  overcome  appeared  almost  insurmountable,  and 
most  of  the  projects  have  been  tacitly  abandoned. 

"But  within  the  last  few  years,  the  acquisition  of  California 
by  the  United  States,  and  the  commercial  activity  which  resulted 


14  SHIP-CANAL. 

from  the  working  of  the  gold  fields,  so  immediately  followed  by 
A  similar  discovery  of  the  precious  metal  in  Australia,  and  the  con- 
sequent rapid  development  of  trade  with  that  continent,  the  ex- 
tension of  commercial  enterprise  throughout  the  whole  of  the 
Pacific  and  the  Indian  Oceans — all  concur  in  rendering  the  real- 
ization of  this  project  indispensable."  * 

If  a  passage  through  the  isthmus  were  made,  thou- 
sands of  ships  and  vessels  of  all  classes  with  their  cargoes 
would  pass  through  it  from  and  to  every  clime ;  it  would 
save  thousands  of  miles  in  sailing  distance,  weeks  and 
months  of  time,  and  the  difficulties  and  dangers  of  the 
Capes  of  Good  Hope  and  the  Horn  be  avoided.  It  would 
open  to  our  merchants  new  fields  for  enterprise  and  rich 
markets  for  their  wares  and  the  various  productions  of 
the  country. 

It  has  been  carefully  estimated  that  fourteen  thousand 
miles  between  New  York  and  San  Francisco,  and  ten 
thousand  miles  to  China,  India,  Japan,  and  the  Sandwich 
Islands,  British  Australia,  the  Dutch,  English,  and  French 
East  Indies,  New  Zealand,  the  Russian  American  posses- 
sions, the  coasts  of  Central  America  on  the  Pacific,  Chili 
and  Peru,  or  nearly  in  this  ratio,  may  be  saved  on 
every  outward  voyage  our  ships  make,  and  the  same  dis- 
tance on  the  return.  The  attainment  of  such  great  results 
would  give  an  extraordinary  impulse  to  the  commerce  of 
the  United  States  and  other  nations. 

From  the  time  of  the  discovery  of  this  continent,  a 
short  passage  to  the  East  has  been  constantly  desired— 
a  region  Columbus  was  seeking  for  when  he  discovered 
the  New  World.  The  commercial  history  of  the  past 
shows  that  whatever  country  has  hitherto  controlled  the 
trade  of  the  East  has  invariably  held,  for  the  time  being, 
the  greatest  commercial  power  in  the  world.  In  ancient 
times,  Carthage  and  Alexandria  controlled  the  trade  of 
the  land  of  spices  and  frankincense.  Venice  owed  her 
splendor  and  commercial  rule  to  the  same  cause.  At  a 
later  day,  when  the  discovery  of  the  passage  by  the  Cape 
of  Good  Hope  had  been  made  by  the  Portuguese,  they 
held  the  key  to  the  East.  The  trade  with  India  in  silks, 

*  F.  M.  Kelley,  Esq.,  of  New  York,  before  the  Institute  of  Civil  Engineers, 
London,  1855. 


SHIP-CANAL.  15 

fine  cottons,  linens,  spices,  and  myrrh,  gave  to  Portugal 
such  a  supremacy  in  Europe,  that  her  rival,  Spain,  fitted 
out  the  expedition  which  bore  the  discoverer  of  this  con- 
tinent to  our  shores.  It  did  not  result  in  the  discovery 
of  the  passage  so  ardently  desired,  and  there  was  almost 
as  much  disappointment  felt  that  a  way  to  India  was  not 
found,  as  there  was  joy  at  the  discovery  of  America. 

When  the  Dutch,  half  a  century  or  more  later  (Pres- 
cott  and  Helps),  secured  a  portion  of  the  Indian  trade, 
they,  too,  reaped  the  benefits  and  shared  in  the  immense 
gains.  Subsequently  England  disputed  with  Portugal 
and  Holland  for  this  trade ;  fierce  and  bloody  wars  were 
waged ;  and  history  now  records  the  unrivalled  extent  of 
English  commerce,  which  has  vastly  contributed  to  her 
power.  During  the  ]ast  few  years  we  have  been  disput- 
ing with  her  for  this  trade,  and  we  have  in  part  succeeded ; 
but  if  we  desire  further  gains  in  this  respect,  we  must 
place  ourselves  in  a  central  geographical  position  by  mak- 
ing a  passage  through  the  isthmus. 

Nations  have  made  great  sacrifices  to  secure  the  benefits 
of  this  commerce.  The  most  recent  illustrations  may  be 
found  in  the  late  Kussian  war,  which,  stripped  of  its  pre- 
tended objects  and  the  varied  phases  of  diplomacy,  may 
be  regarded  as  a  struggle  for  the  control  in  the  Indies 
and  the  trade  of  that  country ;  for,  by  possessing  Con- 
stantinople, Russia  would  have  had  a  transit  by  the  pen- 
insula to  the  Persian  Gulf  and  the  Red  Sea,  and  thence, 
by  channels  of  communication  now  open,  into  the  Indian 
Ocean. 

It  appears  to  me  that  no  one,  familiar  with  the  subject 
and  the  sources  of  commercial  strength  and  power,  can 
justly  doubt  the  importance  and  utility  of  an  inter-oceanic 
communication,  by  means  of  a  ship-canal.  The  main 
point  to  be  determined  is,  whether  it  is  feasible  ;  has  any 
route  been  discovered  that  science,  skill,  and  energy  can 
overcome,  within  such  a  cost  as  to  make  its  prosecution 
and  completion  practicable  ?  While  the  subject  has  occu- 
pied attention  for  several  generations,  more  recent  elabo- 
rate explorations  and  surveys  indicate  only  five  or  six 
routes  as  at  all  practicable.  In  this  connection,  engineer- 
ing problems  are  not  so  difficult  of  solution  as  to  obtain 


16  SHIP-CANAL. 

the  capital  required  in  the  experiments  and  accomplish- 
ment. The  routes  to  which  public  attention  has  been 
drawn  are  the  Tehuantepec,  Honduras,  Nicaragua,  Pan- 
ama, San  Miguel,  Chipo,  and  the  Atrato. 

In  examining  the  several  routes,  my  attention  has  been 
particularly  attracted  to  the  Atrato  for  its  practicability; 
and  more  especially,  because  it  can  be  constructed  with- 
out locks,  and  at  much  less  cost,  for  a  canal  of  the  same 
size,  than  at  any  other  point.  These  routes  I  propose 
briefly  to  examine. 

The  Tehuantepec  route  commences  on  the  Bay  of  Vera 
Cruz,  in  longitude  21°  from  Washington,  and,  crossing 
the  dividing  ranges  of  the  water-sheds  of  the  continent, 
extends  to  the  Puebla  of  Tehuantepec,  on  the  Pacific. 
The  distance  is  one  hundred  and  eighty-six  miles,  and  the 
summit  level  at  the  pass  of  Nisi  Correjor  is  eight  hun- 
dred and  fifty-five  feet  above  the  level  of  the  sea.  The 
topographical  features  of  the  country  are  a  great  general 
slope  from  the  sea,  on  either  side,  to  the  summit,  which  is 
nearer  to  the  Pacific  than  to  the  Atlantic. 

No  water  exists  at  a  sufficient  elevation  to  operate  a 
canal  with  locks,  even  if  locks  were  not  objectionable, 
as  they  are,  where  they  can  be  dispensed  with ;  and  to 
make  an  open  cut  from  sea  to  sea  would  cost,  nearly  as 
I  have  been  able  to  learn,  over  a  thousand  millions  of 
dollars. 

The  data  upon  which  my  conclusions  are  founded  were 
collected  by  the  Government  engineers.  This  line,  al- 
though favorable  for  a  railroad — a  point  which  I  do  not 
question — still  is  not,  in  my  judgment,  adapted  for  a  ship- 
canal.  Since  accurate  surveys  were  made,  its  practica- 
bility, I  believe,  has  not  been  urged. 

The  Honduras  line  lies  eastward  of  the  Balize,  and 
runs  in  nearly  a  southerly  direction  across  the  isthmus 
known  as  Baya  Honda,  from  Puerto  Cabello  to  Fonseca. 
The  length  of  the  route  is  one  hundred  and  sixty  miles, 
and  the  summit  level  is  two  thousand  six  hundred  and 
eighty-one  feet  above  the  sea.  Notwithstanding  the  riv- 
ers Humuya  and  Goascoran  interlock,  and  their  head- wa- 
ters pass  one  another,  still  the  supply  of  water  is  insuffi- 
cient, and  the  great  height  of  the  summit  would  require 


SHIP-CANAL.  17 

east  one  hundred  and  sixty  locks  of  great  magnitude, 
and  very  costly.  I  therefore  consider  this  line  out  of  the 
question  for  canalization  ;  for  a  railroad  it  is  practicable. 

The  Nicaragua  route  has  been  very  much  discussed,  and 
in  point  of  desirability  for  a  water  communication  be- 
tween the  oceans  is  undoubtedly  next  best  to  the  Atrato, 
but  is  much  inferior  to  it,  for  the  reasons  which  I  will 
hereafter  present.  At  this  place  an  elevation  of  one  hun- 
dred and  twenty-two  feet  has  to  be  overcome,  and,  ac- 
cording to  the  most  approved  plans,  at  least  thirty  locks 
would  be  necessary.  Water  here  is  abundant  on  the 
summit,  and  at  the  Atlantic  terminus  there  is  a  good 
harbor  ;  but  on  the  Pacific  a  harbor  must  be  constructed 
at  Breto,  or  in  that  vicinity,  in  order  to  make  the  commu- 
nication complete. 

If  the  use  of  locks  was  not  greatly  disadvantageous, 
the  Nicaragua  line  would  claim  our  warmest  support  ; 
but  the  difficulty  and  danger  of  elevating  great  ships  to 
the  height  of  one  hundred  and  twenty  -two  feet,  and  then 
lowering  them  again  every  time  a  passage  is  to  be  made 
from  one  ocean  to  another,  must  be  apparent.  Locks 
offer  serious  objection  to  such  navigation  ;  each  lock  of  a 
canal  is  nearly  similar  to  a  dry  dock,  and  thirty  would 
have  to  be  passed  each  way  ;  in  addition  there  is  the  diffi- 
culty and  uncertainty  attending  the  use  of  locks,  arising 
from  the  failure  of  the  gates  that  enclose  them,  which,  in 
this  case,  would  number  one  hundred  and  twenty,  if  the 
locks  were  single  lifts,  which  are  most  desirable.  The 
cost  of  keeping  such  mechanical  structures  in  repair 
would  be  great.  The  risk  and  injury  to  vessels  from 
striking  against  them  are  to  be  regarded,  and  the  proba- 
bility of  occasional  delay  in  them,  when  out  of  repair,  is 
to  be  taken  into  consideration. 

At  Nicaragua,  the  cost  of  constructing  a  work  equal 
in  width  and  depth  would  be  more  than  at  the  Atrato. 
I  am  aware  that  plans  have  been  made,  the  estimated 
cost  of  which  would  be  less  than  is  contemplated  at  the 
Atrato  ;  but  these  plans  propose  a  canal  of  much  less 
depth  and  width,  and  insufficient  to  do  the  trade  required. 
I  am  confident,  from  the  estimates  that  have  been  made 
—  and  I  speak  from  a  knowledge  of  the  case  —  that  the 


—  and 


18  SHIP-CANAL. 

same  sized  canal,  even  with  locks,  which  would  mate- 
rially reduce  its  working  capacity,  cannot  be  built  at 
Nicaragua  for  the  same  price  as  at  the  Atrato. 

Upon  the  Panama  route  a  railroad  is  now  in  successful 
operation.  It  is  undoubtedly  one  of  the  most  desirable 
lines,  if  not  the  best  route,  for  a  railroad  crossing  the 
Isthmus ;  it  is  but  forty-seven  and  a  half  miles  long,  and 
good  harbors  exist  at  either  end.  But  for  the  purposes 
of  a  canal,  its  disadvantages  may  be  summed  up  in  a  few 
words.  The  canal  must  be  forty -two  miles  long ;  ships 
must  be  lifted  two  hundred  and  fifty-seven  feet.  At  this 
elevation  there  is  not  sufficient  water  to  feed  the  canal, 
and  water  must  be  collected  in  reservoirs  in  the  moun- 
tains, and  brought  sixty-one  miles  through  a  trench  of 
more  than  one  hundred  and  fifty  feet  deep.  Even  then, 
thirty-six  locks  would  be  required.  If  an  open  cut  be 
attempted,  the  quantity  of  material  to  be  removed  would 
be  equal  to  over  three  times  what  is  necessary  at  the 
Atrato,  and  a  lock  on  the  Pacific  would  be  indispensable. 

Various  explorations  have  been  made  at  San  Miguel 
under  the  directions  of  the  engineers  of  the  Government 
of  the  United  States,  Great  Britain,  Spain,  and  Holland ; 
but  no  line  at  all  proper  for  a  ship-canal  has  yet  been 
discovered. 

The  Chipo  route  has  only  been  surveyed  on  the  At- 
lantic coast;  and  the  range  of  mountains  (Cordilleras) 
seems  to  render  it  not  available  for  the  purpose  of  a  ship- 
canal  at  this  point. 

The  proposed  route  for  the  Atrato  Canal  is  through  an 
open  cut  from  the  sea  to  the  waters  of  a  navigable  river, 
having  sufficient  depth  to  float  the  largest  man-of-war 
and  merchant  ships;  and  no  locks  or  other  impediments 
are  required.  The  route  to  which  I  refer  lies  in  the  Re- 
public of  New  Granada,  in  the  province  of  Choco,  and 
may  be  found  between  the  seventh  and  eighth  degrees 
of  north  latitude,  and  the  seventy-seventh  and  seventy- 
eighth  degrees  of  west  longitude  from  Greenwich.  It 
begins  at  a  good  harbor  at  the  mouth  of  the  Atrato  River, 
in  the  Bay  of  Candilaria,  and  thence  ascends  the  Atrato 
River  to  one  of  its  affluents. 

In  the  early  part  of  the  present  century,  the  venerable 


SHIP-CANAL.  19 

and  remarkably  far-sighted  Baron  Alexander  Von  Hum- 
boldt,  in  his  "  Essais  Politique,"  in  describing  the  various 
routes  that  probably  existed  for  forming  interoceanic  na- 
vigation, designated  the  line  of  the  valley  of  the  Atrato 
River  as  worthy  of  particular  consideration.  Humboldt 
came  to  this  conclusion  at  that  early  period,  from  having 
personally  examined  this  and  the  other  proposed  routes : 
and  in  his  various  writings,  he  urges  the  merits  of  this 
particular  line.  The  transits  at  Honduras  and  Tehuan- 
tepec,  the  canoe  navigation  at  the  Lake  Nicaragua,  and 
the  mule  path  at  Panama,  however,  for  many  years  drew 
off  the  attention  of  commercial  men  and  capitalists  from 
the  Atrato. 

In  1850,  General  T.  Be  Mosquera,  ex-President  of  the 
country,  in  a  work  entitled  u  Physical  and  Political  Geog- 
raphy of  New  Granada,"  drew  attention  again  to  the  val- 
ley of  the  Atrato,  and  a  citizen  of  the  State  of  New  York 
(Mr.  Frederick  M.  Kelley),  perceiving  the  vast  benefits 
to  be  derived  to  his  own  city,  the  country,  and  the  world, 
from  any  good  route  across  the  Isthmus,  but  more  par- 
ticularly from  any  that  could  be  made  available  for  pur- 
poses of  canalization,  learning  the  views  of  Humboldt, 
and  all  that  Mosqnera  could  inform  him  relative  to  this 
locality,  determined,  in  1853,  as  a  mere  matter  of  public 
utility,  and  without  any  immediate  hope  of  personal  ad- 
vantage, with  scarcely  the  remotest  prospect  of  self-ag- 
grandizement, to  fit  out  an  expedition  at  his  own  expense, 
and  have  surveys  made,  to  see  if  the  impressions  of  the 
illustrious  men  I  have  named  were  founded  in  fact  or 
otherwise. 

The  first  surveys  were  made  up  the  river  Atrato  and 
over  the  dividing  isthmus,  and  down  the  river  San  Juan, 
upon  the  line  of  a  small  canoe-canal,  more  properly  a  ditch, 
that  the  priests  of  the  mission  of  San  Puebla  had  caused 
the  natives  to  dig,  many  years  ago,  and  through  which 
canoes  laden  with  the  gold  and  merchandise  of  the  sur- 
rounding countries  passed,  at  times,  at  high  water,  from 
one  ocean  to  the  other.  This  line  did  not  present  such 
favorable  features  as  were  anticipated;  but,  nothing 
daunted,  three  other  expeditions,  making  four  in  all  up 
to  that  period,  were  fitted  out  with  praiseworthy  zeal, 


20  SHIP-CANAL. 

by  the  same  individual.  They,  however,  all  merely 
added  to  our  geographical  knowledge  of  this  highly  in- 
teresting portion  of  our  continent. 

The  fourth  expedition,  at  nearly  the  close  of  the  third 
year  of  the  researches,  gave  some  slight  promise  of  suc- 
cess, having  learned  from  the  traditions  of  the  natives 
that  low  ground  existed  near  the  seventy-seventh  paral- 
lel ;  but,  owing  to  circumstances  they  could  not  control, 
they  were  compelled  to  return  without  making  any  very 
important  discoveries.  The  data  they  furnished,  how- 
ever, were  the  key  to  future  success. 

Another  expedition  was  started  and  intrusted  to  an 
explorer,  with  directions  to  search  in  the  vicinity  of  the 
locality  before  indicated  as  practicable.  The  dense 
growth  of  underbrush,  and  the  gigantic  forests  that  cover 
the  entire  face  of  the  country,  made  the  work  of  explo- 
ration tedious  and  difficult :  but  after  an  absence  of  sev- 
eral months  the  party  returned  with  the  tidings  that  a 
route  had  been  discovered  and  surveyed,  by  which  a 
canal  could  be  made  to  connect  the  waters  of  the  Atlan- 
tic and  Pacific  Oceans  without  locks,  and  at  such  a  cost 
as  to  be  commercially  available.  No  speculations,  how- 
ever, were  gone  into ;  sober,  serious  reflection  seemed  to 
indicate  that,  before  any  public  demonstration  was  made, 
the  surveys  should  be  verified  by  a  Government  corps. 
Years  had  been  occupied,  and  a  large  amount  of  money 
expended  by  a  private  individual  to  solve  this  great  prob- 
lem. The  surveys  being  completed,  Mr.  Kelley  pro- 
ceeded to  Europe  with  the  result.  "  I  ask  to  submit,  in 
his  own  language,  his  reception  abroad.  He  says : 

"I  went  to  England,  and  submitted  my  plans  and  reports  to 
the  Royal  Geographical  Society  of  London,  and  to  the  British 
Institution  of  Civil  Engineers.  I  invited  the  searching  criticism 
of  those  most  competent  to  judge  in  the  mother  country.  I  went 
to  France,  and  knowing  how  deep  an  interest  the  Emperor  Napo- 
leon had  taken  in  the  promotion  of  similar  enterprises,  and  how 
profound  a  knowledge  he  had  displayed  of  the  general  subject, 
at  a  time  when  correct  views  were  confined  to  a  very  limited 
circle,  I  laid  my  plans  arid  surveys  before  his  Imperial  Majesty, 
and  invited  to  their  consideration,  in  the  most  public  manner,  the 
highest  science  in  the  service  of  the  Government  and  people  of 


SHIP-CANAL.  21 

France.  I  went  to  Berlin,  and  frankly  explained  to  that  illus- 
trious sage,  the  pioneer  of  all  scientific  knowledge  of  Central 
America,  the  general  views  which  I  entertained,  and  the  nature 
of  the  evidence  by  which  they  had  been  confirmed.  In  those 
three  enlightened  countries  I  was  not  treated  as  a  stranger. 
There  was  a  grandeur  in  the  design  of  which  I  was  the  bearer,  a 
dignity  in  the  mission  with  which  I  was  charged,  that  won  for 
me  courtesies  which,  on  mere  personal  grounds,  no  stranger,  go- 
ing to  Europe  for  the  first  time,  could  have  anticipated  or  claimed. 
From  the  Emperor  of  the  French,  from  Lord  Clarendon,  from 
Sir  Roderick  Murchison,  from  Baron  Humboldt,  from  Rear-Ad- 
miral Beechy,  from  Robert  Stephenson,  Admiral  Fitzroy,  and 
the  members  generally  of  the  Royal  Society  and  Institute,  1 
received  great  kindness  ;  and,  what  was  of  more  importance,  they 
applied  to  my  plans  and  reports,  in  a  catholic  and  courteous  spirit, 
but  with  the  rigid  exactness  due  to  science  and  their  own  high 
reputations,  those  tests  suggested  and  fortified  by  their  great  ex- 
perience. A  friendless  and  unknown  American  citizen  was 
treated  by  these  men  as  though  he  was  a  brother,  not  because  he 
was  eminent  in  science,  but  because  they  recognized  in  him  the 
zeal,  the  prophetic  hope  and  self-devotion  which  are  ever  the  hand- 
maids of  science."  * 

The  important  results  thus  far  attained  were  brought 
to  the  attention  of  the  Thirty-Fourth  Congress  at  its 
second  session.  Appreciating  the  efforts  made,  and  the 
great  results  to  flow  from  interoceanic  communication,  an 
appropriation  was  made  by  the  Government  of  the  Uni- 
ted States  for  a  verification  of  the  surveys  to  which  I 
have  alluded.  Congress  authorized  the  Secretaries  of 
War  and  the  Navy,  under  direction  of  the  President,  to 
di-tail  officers  for  the  survey  and  have  the  verification 
made.  The  Navy  Department  selected  Lieutenant  Cra- 
ven, and  the  War  Department  detailed  Lieutenant  Mich- 
ler,  of  the  topographical  engineers.  These  officers,  upon 
their  return,  proceeded  to  prepare  their  reports ;  and  the 
result  of  the  expedition  will  probably  be  laid  before 
Congress  at  the  present  session.  While  I  am  not  able  to 
give  the  detail  of  the  survey,  I  am  sufficiently  informed 
to  state  that  their  reports  will  confirm  the  physical  facts 
as  represented,  including  harbors,  rivers,  rock  and  earth 
excavation,  and  the  general  character  and  quantity  of 
material  to  be  removed  to  form  the  canal,  upon  which 

*  Kelley's  Pamphlet  on  the  Atrato  Ship-Canal 


22  SHIP-CANAL. 

the  former  estimate  of  the  cost  of  this  work  was  based. 
This  estimate  of  cost  had  been  computed  by  several  ex- 
perienced engineers  in  this  country. 

By  the  proceedings  of  the  Institution  of  Engineers  of 
London  for  1858, 1  find  that  body — perhaps  as  competent 
as  any  in  the  world  to  judge — indorses  the  estimate  made 
by  our  own  engineers.  I  have  also  seen  the  written  ex- 
pressions of  many  able  and  intelligent  American  engi- 
neers on  the  subject;  letters  from  distinguished  engineers 
— Eobert  Stephenson,  George  Rennie,  and  other  English 
and  French  engineers  of  eminence — verifying  the  estimates 
made  for  the  work  in  this  country.  In  April  and  May, 
1856,  the  Royal  Geographical  Society,  at  Mr.  Kelley's 
request,  discussed  this  question  at  great  length,  and  took 
very  decided  ground  in  favor  of  the  work  being  done. 
The  President,  who  was  Minister  to  England  while  Mr. 
Kelley  was  abroad,  did  all  in  his  power  to  advance  this 
great  measure,  and  suggested  the  application  to  the  Uni- 
ted States  for  verification.  The  French  Emperor  also 
appointed  a  commission  to  examine  the  plans  and  surveys, 
and  they  reported  favorably  to  him,  and  he,  I  learn,  ex- 
pressed a  willingness  to  unite  with  England  and  the 
United  States  in  building  the  canal.  The  plans  were 
submitted  to  Baron  Humboldt,  and  his  approval  was 
obtained. 

Mr.  Chairman,  having  drawn  the  attention  of  this 
honorable  body  to  the  subject  of  ship-canals,  briefly  re- 
ferred to  the  various  projects,  and  given  a  rapid  sketch 
of  the  Atrato,  I  will  now  refer  to  the  benefit  which  the 
commerce  of  this  country  and  other  nations  would  derive 
through  such  a  channel  of  communication  from  the  Atlantic 
to  the  Pacific  Ocean.  I  have  already  alluded  to  the  great 
saving  in  travelling  distance,  and  refer  to  the  Appendix 
for  the  detail.  The  first  influence  felt  would  be  from  the 
supply  of  a  colony  of  workmen,  consuming  the  bread- 
stuffs,  manufactures,  tobacco,  and  other  products  of  the 
United  States,  during  the  construction  of  the  work. 

I  find,  by  official  statistics,  that  the  total  tonnage  owned 
by  the  United  States,  that  would  use  this  canal,  if  con- 
structed, is  1,857,485  tons.  The  cargoes  are  valued  at 
$100,294,687,  and  the  ships  at  $92,874,250;  making  a 


SHIP-CANAL.  23 

total  amount  of  value  afloat,  belonging  to  the  United 
States,  of  $193,168,937.  This  includes  the  whale  fishery, 
but  not  the  precious  metals  from  California.  Taking  the 
diminution  of  time  as  a  basis,  the  benefit  by  the  gain  in 
sailing  distance  from  one  part  of  the  world  to  the  other 
by  the  Atrato  Canal,  estimating  the  saving  of  insurance, 
interest  on  money,  wages  of  men,  freight,  wear  and  tear, 
it  appears  that  the  sum  of  $35,995,930  would  be  annually 
saved  to  the  United  States  alone,  as  follows  : 

Table  showing  the  saving  in  money  to  the  trade  of  the  United 
States  that  would  result  from  the  use  of  the  Atrato  Canal,  ac- 
cording to  the  official  statistics  for  the  year  1857. 

Insurance  on  vessels  and  cargoes  saved. . . .   $3,863,378 

Interest  saved  on  cargoes 3,008,840 

Saving  of  wear  and  tear  of  ships,  5  per  cent.     4,643,712 

Saving  of  freight-money  (by  time) 11,250,000 

Saving  of  wages,  provisions,  crew,  etc 13,230,000 


Total  yearly  saving  to  the  United  States. .  $35,995,930 


Should  the  United  States  assume  to  pay  the  whole  in- 
terest on  the  work,  during  its  progress  and  completion, 
the  amount  thus  saved  to  the  commerce  of  the  country  in 
one  year  exceeds,  by  $8,500,000,  the  entire  sum  that  would 
be  required  to  be  paid  in  twelve  years,  or  seventeen  times 
the  average  annual  payment.  If  England  and  France 
unite,  it  is  over  forty  times  the  annual  sum  that  would 
be  required. 

We  finJ  the  tonnage  of  England,  that  would  pass  this 
canal  is  1,029,295  tons;  the  value  of  tonnage  and  trade 

[is  $190,649,750.     The  saving  to  England,  upon  the  fore- 
going basis,  would  be  $9,950,348,  as  follows : 

Table  showing  the  yearly  saving  in  money  to  the  trade  of  England^ 
a*  <Y.VV  rfiiinnl  fty  the  official  returns  for  1856,  if  the  trade  went 
through  the  Atrato  Canal,  instead  of  round  trie  Capes. 

Insv 

£f 

Savi 
Savi 

' 


Insurance  on  vessels  and  cargoes $1,906,495 

Interest  on  cargoes 1,858,826 

Saving  of  wear  and  tear  of  ships 2,573,237 

Saving  of  wages,  provisions,  finding,  etc 3,611,790 

Total $9,950,348 


24  SHIP-CANAL. 

The  tonnage  of  France  that  would  pass  through  the 
Atrato  route  is  162,735  tons;  the  tonnage  and  trade  is 
valued  at  $67,210,609 ;  the  saving  to  France  would  be 
as  follows : 

TabU  showing  the  saving  in  money  to  the  trade  of  France  that 
would  result  from  the  use  of  the  Atrato  Canal,  according  to 
the  official  statistics  for  the  year  1857. 

Insurance  on  vessels  and  cargoes $75*3,000 

Interest  saved  on  cargoes 452,084: 

Saving  of  wear  and  tear  of  ships 325,470 

Saving  of  freight-money,  estimated  by  time. .     276,949 
Saving  of  wages,  provisions,  and  outfit  of  ships.     376,427 

Total  yearly  saving  to  France $2,183,930 

Of  countries  other  than  those  named — the  tonnage  that 
would  use  this  communication  is  16,802,000  tons;  the 
saving  would  be  about  $1,400,000. 

The  aggregate  value  of  the  foregoing  tonnage  and 
trade  is  $467,831,296 ;  and  the  total  saving  would  be 
$49,530,208  annually. 

These  statements  are  predicated  upon  the  present  state 
of  commerce.  The  average  increase  for  the  last  ten  years 
was  about  one  hundred  and  ten  per  cent.,  and  it  is  fair  to 
assume  that  the  trade  will  increase  one  hundred  per  cent, 
in  the  next  ten  years,  in  which  case  it  is  estimated  the 
saving  to  the  world  would  be  $99,060,416. 

Having  presented  the  trade  in  an  aggregate  form,  it  is 
perhaps  proper  to  say  that  there  are  many  specific  in- 
terests that  would  be  greatly  benefited.  It  is  believed 
that  the  whaling  fleet,  for  example,  could  go  into  the 
fishing  grounds,  and  return  with  as  much  oil  and  bone  as 
they  do  now,  in  two-thirds  of  the  time  they  now  spend, 
and  the  coasting  vessels  of  New  England  and  the  north- 
east could  find  employment  in  the  Pacific,  during  the  sea- 
sons they  are  now  idle,  by  procuring  guano,  etc. 

Notwithstanding  the  vast  benefits  that  would  be  secured 
to  commerce,  it  might  be  urged  that  the  Government,  in 
addition,  should  have  some  direct  benefit.  In  answer  to 
this,  in  rendering  the  aid  required,  Congress  could  pro- 
vide that  all  national  vessels  and  munitions  of  war  should 
pass  free  of  charge  for  a  certain  period. 


SHIP-CANAL.  25 

In  transporting  heavy  merchandise  (which  is  about 
ninety  one-hundredths  of  all  the  trade)  across  the  Isthmus, 
the  canal  can  only  be  resorted  to  on  account  of  economy ; 
railroad  communication  being  too  costly,  besides  the  diffi- 
culty in  unloading  and  loading.  The  charge  for  trans- 
porting a  ship  and  cargo  of  one  thousand  tons  by  the 
canal  would  not  probably  equal  the  twenty-fifth  part  of 
what  the  cargo  would  cost  by  railroad. 

If,  instead  of  constructing  a  canal,  it  were  determined 
to  build  railroads  across  the  Isthmus,  it  would  be  found 
that  there  is  not  only  a  want  of  room  to  build  them  upon, 
but  that  it  would  require  twenty  roads,  each  of  them 
equal  in  capacity  to  the  Panama  road,  to  be  capable  of 
doing  the  business  of  the  canal ;  these  twenty  roads,  if 
built,  would  cost  at  least  double  as  much  as  the  canal,  and 
could  not  be  kept  in  order  for  many  times  as  much  as 
would  be  required  for  the  canal. 

Independently  of  the  risk  and  expense  of  loading  and 
unloading,  the  cost  of  transportation  by  railroad  in  that 
country  is  nearly  forty-five  times  as  much  as  it  would  be 
by  canal ;  or,  in  other  words,  the  canal  can  do  the  entire 
freighting  trade  of  the  world  in  this  direction,  pay  an 
interest  on  the  cost  and  the  interest  sunk  during  construc- 
tion, and  maintain  and  operate  itself  for  $8,140,000  per 
an  in  ii  n.  To  do  the  business  by  railroad  that  the  canal 
could  do  at  this  cost,  at  the  prices  now  paid  to  the  rail- 
road, would  amount  to  $360,000,000. 

I  would  next  invite  your  attention,  and  that  of  this 
honorable  body,  to  another  branch  of  the  subject;  which 
is.  the  physical  advantages  of  this  route  as  compared  with 
all  others  for  communication  between  the  oceans. 

When  it  shall  have  been  determined  that  any  road, 
railroad,  or  canal,  is  necessary  in  any  direction,  our  next 
duty  is  to  decide  which  will  be  most  useful,  and  in  con- 
nection with  the  expense  to  be  incurred,  involving  and 
evolving  one  question  with  the  other,  to  settle  its  final 
place.  Many  situations  are  only  suited  for  wagon  roads, 
and  these  are  ample  and  sufficient  for  the  wants  of  the 
Government  and  the  country  they  accommodate.  Other 
places,  again,  require  more  rapid  communication,  and  a 
greater  amount  of  tonnage  is  expected  to  pass  over  them. 


26  SHIP-CANAL. 

Here  it  is  proper  to  employ  the  facilities  afforded  by 
modern  science,  and  construct  railroads  or  canals.  If 
swiftness  of  movement,  as  in  the  case  of  passengers  and 
mails,  be  desirable,  then  railroads  should  be  preferred. 
If  the  commodities  to  be  moved  are  heavy,  and  water- 
carriage  can  be  employed,  more  particularly  where  a  part 
of  the  journey  is  performed  in  ships  from  the  necessities 
of  the  case,  it  is  advisable  to  make  a  canal,  more  es- 
pecially if  the  goods  can  be  carried,  ship  and  all,  through 
without  handling,  so  as  to  avoid  the  process  of  loading 
or  unloading.  If  goods  could  be  conveyed  to  our  inland 
cities  in  the  same  ships  that  cross  the  ocean,  with  their 
cargoes  on  board,  no  one  would  desire  to  unload  them 
into  a  canal- boat,  or  on  to  a  railroad.  These  considera- 
tions become  elements  in  the  process  of  reasoning  by 
which  we  should  decide  what  method  is  best  adapted  to 
carry  on  our  enormous  and  constantly-increasing  business 
between  the  two  great  oceans  of  the  world.  If  equal 
advantages  exist  for  loading  and  unloading,  and  water  is 
abundantly  deep,  no  commercial  man  would  prefer  to 
have  his  goods  unloaded  from  his  ship  fifty  miles  from 
the  entrepot,  and  brought  by  wagon  or  railroad  to  his 
warehouse,  when  his  ship  could  as  well  come  to  the  wharf 
at  his  door.  The  same  rule  would  govern  in  crossing  the 
Isthmus. 

The  estimated  cost  of  this  project  is  $73,687,141.  (See 
Appendix.)  It  is  evident  that  a  work  of  this  magnitude 
can  only  be  completed  by  the  aid  of  the  Government,  as 
a  means  for  postal  facilities,  and  for  the  transportation 
of  military  and  naval  stores.  It  is  estimated  that  it  will 
require  at  least  nine  years  to  complete  it.  To  raise  the 
requisite  means,  it  is  proposed  that  the  United  States 
should  guarantee  to  pay  interest  at  the  rate  of  five  per 
cent,  upon  the  amount  expended  in  the  process  of  the 
work,  from  year  to  year,  for  the  period  of  twelve  years. 
The  amounts  in  each,  annually,  would  be  as  follows : 

First  year $150,000 

Second  year 400,000 

Third  year 800,000 

Fourth  year 1,250,000 

Fifth  year 1,700,000 


SHIP-CANAL.  27 

Sixth  year $2,150,000 

Seventh  year 2,600,000 

Eighth  year 3,150,000 

Ninth  year 3,750,000 

Tenth  year 3,750,000 

Eleventh  year 3,750,000 

Twelfth  year 3,750,000 

Total  interest  money $27,200,000 

The  above  is  based  upon  the  supposition  that  this  Gov- 
ernment is  the  sole  promoter.  In  case  England  and 
France  joined,  it  would  be  for  one-third  the  amount. 
The  interest  being  guaranteed  by  the  United  States,  or  in 
conjunction  with  England  and  France,  it  is  believed  that 
those  engaged  in  the  construction  of  the  canal  would  be 
able  to  obtain  the  money  necessary  for  their  object  upon 
the  most  favorable  terms. 

The  estimated  cost  of  this  great  work,  I  am  prepared 
to  admit,  is  a  large  sum ;  but  this  estimate  is  founded 
upon  the  actual  cost  of  doing  the  same  kind  of  work  in 
the  same  kind  of  a  country,  and  is  based  upon  the  amount 
of  cubic  yards  of  rock  and  earth  to  be  excavated,  and 
dredging  to  be  done,  and  is  no  theoretical  hypothesis  of 
something  yet  never  undertaken. 

The  cost  of  this  canal,  Mr.  Chairman,  is  predicated  on 
a  depth  of  thirty  feet  at  low  water,  and  a  width  of  one 
hundred  feet.  It  is  maintained  that  this  is  ample  and 
sufficient  to  pass  the  largest  vessel  afloat.  There  is 
scarcely  a  harbor  that  admits  vessels  drawing  over  thirty 
feet  of  water;  the  great  commercial  marts  of  this  conti- 
nent, Europe  and  Asia,  do  not  allow  vessels  of  this  draft 
to  enter,  or  at  least  do  not  allow  those  drawing  more  to 
pass  over  their  bars,  hence  ships  are  not  built  of  more 
draft  than  this  when  loaded ;  but  as  the  harbors  of  the 
world  mostly  used  do  permit  vessels  of  twenty-eight  or 
t\\  (Mit\  -nine  feet  draft  to  enter,  it  is  deemed  best  to  make 
the  canal,  at  low  water,  as  deep  as  the  deepest  harbors. 
In  width,  it  is  proposed  that  it  shall  be,  as  I  before  said, 
one  huinhvd  feet;  this  will  pass  abreast  two  of  the  large- 
st <d  merchantmen,  with  their  yards  clewed  back,  but 
lot  two  of  the  largest  steamers,  because  of  the  width  of 


28  SHIP-CANAL. 

their  guards  and  wheel-houses ;  these  steamers  must  pass 
by  signals,  singly  in  each  direction,  through  the  rock  cut. 
Up  the  Atrato  River,  vessels  of  any  size,  and  three  or  four 
together,  can  pass  one  another,  so  that  there  would  be  little 
or  no  detention  from  any  of  larger  size,  as  the  wide  part  ex- 
tends for  more  than  half  the  distance  from  ocean  to  ocean. 
No  attempt  whatever  has  been  made  to  underestimate 
the  cost,  or  to  keep  from  the  public  the  information  upon 
which  the  calculations  are  based.  If,  however,  it  is  not 
in  all  respects  correctly  estimated,  a  percentage  of  five  or 
ten  per  cent,  of  error  in  the  calculation  would  not  alter 
our  position.  This  canal  would  be  a  sound  and  proper 
investment  for  the  country  to  make,  at  $75,000,000,  in  the 
manner  proposed ;  and,  if  necessary,  at  twice  that  amount, 
i  In  furtherance  of  the  work,  the  Government  of  New 
Granada  has  not  only  given  all  proper  facilities  to  the 
private  and  Government  engineers  that  conducted  the  ex- 
plorations ;  but  it  has,  by  a  formal  concession,  under  prop- 
er restrictions,  given  the  right  to  construct,  maintain,  and 
operate  the  canal  forever,  accompanying  this  grant  with 
various  desirable  privileges  extended  to  those  that  may 
undertake  the  work.  The  State  of  New  York  has  also 
granted  a  special  charter,  under  which  a  company  may 
be  organized  to  build  the  canal. 

i  Mr.  Chairman,  I  have  merely  presented  some  prominent 
points  bearing  on  this  interesting  subject.  It  is  too  vast 
to  be  discussed  in  all  its  details  under  the  rule  of  this 
House.  I  present  it  to  this  honorable  body  as  worthy  of 
its  most  serious  consideration. 

The  gentleman  (Mr.  Kelley)  whose  name  is  identified 
with  this  great  work  has  quietly  and  unobtrusively,  at  a 
large  individual  expense,  been  endeavoring  to  solve  the 
great  problem  of  the  age.  He  has  brought  this  project 
to  a  position  that  invites  the  attention  of  not  only  our 
own  country,  but  the  whole  world.  I  feel  the  deepest  in- 
terest in  this  subject,  in  consequence  of  the  great  benefit, 
as  I  have  shown,  that  is  to  flow  to  trade.  The  extension 
of  commerce  is  not  only  important  to  national  wealth, 
power,  and  prosperity,  but  is  also  the  great  lever  which 
conquers  and  maintains  peace  and  tends  to  bind  the  na- 
tions of  the  earth  in  perpetual  amity. 


SHIP-CANAL. 


29 


APPENDIX. 


Table  of  the  saving  in  distance  from  New  York  to  the  following 
places  by  the  Isthmus  of  Panama  over  the  Cape  routes. 


From  New  York  to  — 

Distance  via  Cape  of 
Good  Hope. 

Distance  via  Cape 
Horn. 

Distance  via  the  Isth- 
mus of  Panama. 

1*1 

!«o 

i  0*3 

~i|  . 
sgii 

>  o£W 

• 

8£ 
j| 

1L 

•a^w 

-+3  ^ 

-c  -   ^ 

.2  £  & 
«  ®^ 

OQ 

Calcutta  

Miles. 
17,500 
19,500 
20,000 

Miles. 
23,000 
21,500 
22,000 
12,900 
13,500 
14,300 
16,000 
17,800 
18,000 
18,500 
19,000 

Miles. 
13,400 
10,600 
10,400 
4,800 
3,500 
2,800 
2,000 
3,800 
4,000 
4,500 
5,000 

Miles. 
4,100 
8,900 
9,600 

Miles. 

9,600 
10,900 
11,600 
8,100 
10,000 
11,500 
14,000 
14,000 
14,000 
14,000 
14,000 

Canton  

Bhanghae  

Valparaiso  .... 

Callao  

Guayaquil  

Panama 

San  Bias  





Mazatlan 

San  Diego  





San  Francisco  

30 


SHIP-CANAL. 


Table  showing  the  trade  of  the  United  States  that  would  pass 
through  the  Atrato  Canal,  if  now  finished,  taken  from  the  offi- 
cial returns  of  the  year  1857.* 


Countries  traded  with. 

Exports  and  im- 
ports. 

Tonnage. 

Russian  North  American  possessions 
Dutch,  East  Indies           

$126,537 
904  550 

5,735 
16589 

British  Australia  and  New  Zealand. 
British  East  Indies  

4,728,083 
11,744,151 

52,105 
177,121 

French  East  Indies  

98,432 

3665 

Half  of  Mexico             

9,601,063 

34673 

Half  of  New  Granada  

5,375,354 

131  708 

Central  America  

425,081 

36599 

Chili  

6,645,634 

63,749 

Peru  

716,679 

193,131 

Ecuador  

48^979 

1,979 

Sandwich  Islands  

1,151,849 

33  876 

China  

12,752,062 

123  578 

Other  ports  in  Asia  and  Pacific  .... 
Whale  fisheries  

80,143 
10,796,090 

4,549 
116,730 

California  to  east  United  Statesf.  .  . 

35,000,000 

861,698 

Value  of  cargoes  

$100,294,687 

1,857,485 

Value  of  ships  

92,874.250 

at  $50  per  ton. 

Total  value  of  ships  and  cargoes.  .  . 

$193,168,937 

$92,874,250 

*  Congressional  Reports  on  Commerce  and  Navigation,     f  Exclusive  of  gold  dust. 

Whale  ships  and  coasting  vessels  have  been  estimated  gener- 
ally throughout  this  appendix  at  $40  per  ton.  The  United  States 
and  European  commerce  round  the  Capes  is  conducted  in  first 
class  ships,  which  often  cost  $80  per  ton ;  $50  have  therefore 
been  taken  as  the  fair  average  value  in  the  construction  of  this 
table,  which  does  not  include  coasting  trade. 


Table  showing  the  trade  of  England  that  would  pass  through  the, 
Atrato  Canal,  if  now  finished,  taken  from  the  official  returns 
f»r  ////'  year  1856. 


Countries  traded  with. 

Exports  and  im- 
ports. 

Tonnage. 

SL>.775,137 

11,833 

Half  of  Central  America  

1.  "44,817 

5,615 

Half  of  New  Granada  

2,437,605 

10,188 

Chili  

15,486,110 

118,311 

Peru       .    .        

20,473,520 

244,319 

360  015 

1  820 

China....  )  Outward  only  40  days 
Java  .       .  >                j  i     J       i     J 

(    7,077,390 
\    3,821,410 

68,530 
16,003 

c.                 (         saved  bv  canal. 
Singapore.  ) 

Australia  and  New  Zealand  

(    4,364,070 

78,246,095 

16,500 
522,426 

Sandwich  Islands  

520,560 

1,950 

(  /alifornia  *  

2,378,105 

11,800 

Value  of  trade  

$139,184,834 

1,029,295 

51  464,750 

at  $50  per  ton 

Total  value  trade  and  ships. !$190,649,584 


$51,464,750 


Table  showing  the  trade  of  France  that  would  pass  through  the 
Atrato  Canal,  if  now  finished,  taken  from  the  official  returns 
for  the  year  1857. 


Countries  traded  with. 

Exports  and  im- 
ports. 

Tonnage. 

Chili.  . 

$10,000,000 

25,688 

Peru                     

13  160  000 

35  096 

J  lalf  of  Mexico  

2,790  000 

10004 

Illalf  of  New  Granada  

1,090,000 

2,389 

Ecuador    

440,000 

1,651 

Bolivia  

100  000 

1  000 

California    

2  073  859 

8997 

(  'hina  .  .                    .    )  f\            11 

C  2  180  000 

2,028 

Dutch  i&  Indies.  {Ontwardonly. 

Sandwich  Islands  

£  4,440,000 
2,000,000 

20,400 
4,119 

Philippine  Islands  

1,000,000 

1,463 

Australia  

19  800,000 

50,000 

Value  of  cargoes  

$59  073  859 

162  735 

Value  of  ships  

8,136,750 

at  $50  per  ton 

Total  value  

$67,210,609 

$8,136,750 

31 

32  SHIP-CANAL. 

Table  showing  the  total  tonnage  that  would  pass  yearly  through 
the  Atrato  Canal,  if  now  finished,  from  official  returns. 

United  States 1,857,485  tons. 

England 1,029,295     " 

France 162,735     " 

Other  countries 44,555     " 


Total 3,094,070  tons. 

Table  showing  the  general  results  of  the  preceding  tables. 

Tonnage  and  trade  of  United  States $193,168,937 

"   "  "  England 190,649,584 

"  France 67,210,609 

"  "  other  countries 16,802,000 


Total  trade  affected  by  the  canal $467,831,130 

Table  showing  the  saving  to  the  trade  of  the  world  by  using  the 

Atrato  Canal. 

United  States $35,995,930 

England 9,950,348 

France 2,183,930 

Other  countries 1,400,000 


Total $49,530,208 

Exports  of  Great  Britain  increased  one  hundred  and  seven  per 
cent,  in  ten  years.  Exports  of  France  increased  one  hundred  and 
thirty  per  cent,  in  ten  years.  Exports  of  the  United  States  in- 
creased ninety-three  per  cent,  in  ten  years.  The  average  increase 
is  one  hundred  and  ten  per  cent,  in  ten  years.  If  the  trade  in- 
crease one  hundred  per  cent,  in  the  next. ten  years,  the  saving  to 
the  world  will  then  be  $99,060,416  per  annum. 

A  summary  of  the  estimated  cost  of  the  canal  and  appurtenances. 

Works  at  the  mouth  of  the  Atrato $550,800 

Excavations  under  water  in  Truando 3,280,000 

"  at  confluence  of  open  cut,  etc. .          20,000 

Excavation   between   confluence,  as  above, 

and  Pacific  (excepting  tunnel),  calling  all 

the  quantities  rock,  and  estimating  that 

the  grubbing  and  clearing  would  be  thus 

included 39,941,997 

Tunnel  $2,  heading  $10 12,701,920 

Harbor  at  Kelley's  Inlet 1,150,000 


or*  ^V 

"UNIVERSITY  1 


SHIP-CANAL. 

Lighthouse $35,000 

Piers 55,000 

Depots  on  Pacific 50,000 

"       on  line,  and  Hospitals 35,000 

Depot  at  Junction 15,000 

Executive  Department 120,000 

Engineer  Department 375,000 

Medical  Department 80,000 

Pay  Department 90,000 

Commissary  Department 120,000 

Quartermaster's  Department 135,000 

Dredging  machinery 350,000 

Hoisting  and  pumping  engines  and  machinery  875,000 


$58,949,717 
Add  25  per  cent,  contingencies 14,737,424 


Total $73,687,141 


The  following  table  will  show  the  money  to  be  spent  year  by 
year,  and  the  interest  on  each  year's  expenditure,  as  long  as  paid 
by  the  Governments,  and  the  amount  of  interest-money  to  be 
paid  each  year : 

Spend. 
1st  year $3,000,000 


2d 

3d 

4th 

5th 

6th 

7th 

8th 

9th 


5,000,000 

«    8,000,000 

"     9,000,000 

"     9,000,000 

"     9,000,000 

"     9,000,000 

"     11,000,000 

"     12,000,000 


Pay  interest  at  5  per  cent. 
$150,000  for  12  years  $1,800,000 


250,000  for  11 
400,000  for  10 
450,000  for    9 
450,000  for 
450,000  for 
450,000  for 
550,000  for 
600,000  for 


2,750,000 
4,000,000 
4,050.000 
3,600^000 
3,150,000 
2,700,000 
2,750,000 
2,400,000 


Total  cost.. $75,000,000 


Total  interest $27,200,000 


NOTE. — 1  take  pleasure  in  acknowledging  my  obligation  to  F. 
M.  Kelley,  Esq.,  for  valuable  information,  and  the  statistics  con- 
tained in  my  remarks  and  the  appendix. 

3 


A  JUST  BANKRUPT  LAW: 

ITS  PRESENT  NECESSITY  AND   IMPORTANCE  AS  A 
PERMANENT  ACT. 


HOUSE  OF  REPRESENTATIVES,  June  3,  1862. 


When  this  speech  was  delivered,  events  arising  from  the  war 
had  caused  an  almost  unprecedented  number  of  mercantile  fail- 
ures. They  had  befallen  the  sufferers  suddenly,  unexpectedly, 
and  from  causes  entirely  beyond  their  control.  Hence,  measures 
of  relief  were  due  to  them.  Mr.  Ward  showed  that,  reasoning 
from  the  ordinary  principles  of  human  nature  and  the  experience 
of  commercial  countries,  a  bankrupt  law,  duly  guarding  against 
fraud,  but  releasing  the  honest  debtor,  is  for  the  interest  of  the 
creditor  himself,  and  should  be  a  part  of  every  just  and  well-con- 
sidered code. 

Mr.  CHAIRMAN:  The  recent  action  of  this  honorable 
body,  in  postponing  until  the  third  Monday  of  December 
next  all  consideration  of  the  bill  reported  by  the  Special 
Committee  "  to  establish  a  uniform  system  of  bankruptcy 
throughout  the  United  States,"  is  viewed  with  much  sur- 
prise and  regret  by  a  large  class  of  our  citizens  who  are 
bowed  down  by  pecuniary  obligations,  from  which  there 
can  be  no  relief  except  through  the  provisions  of  such  a 
law.  Supposing  that  adequate  measures  to  relieve  honest 
but  insolvent  debtors,  and  to  afford  creditors  increased 
facilities  for  collecting  their  just  debts,  would  be  reported 
at  the  proper  season,  early  during  the  present  session  of 
Congress,  I  purposed  making  some  remarks  when  the  bill 
should  be  discussed,  but  as  the  House  has,  I  think,  incon- 
siderately and  without  a  full  knowledge  of  the  subject 
summarily  disposed  of  it  for  a  time,  I  deem  it  my  duty  to 
my  constituents,  and  to  the  country  itself,  to  bring  for- 
ward the  chief  points  of  the  question  to  a  fair  and  just  con- 
sideration of  the  representatives  of  the  people.  Such  an  act 


5ANKKUPT   LAW.  35 

I  regard  as  of  vast  public  moment,  and  one  that  should  not 
be  delayed,  even  in  a  crisis  like  the  present,  unparalleled 
in  the  history  of  nations,  when  treason  is  seeking  to  over- 
throw the  government.  While  crushing  out  this  most 
unnatural  rebellion,  we  should  not  be  unmindful  of  im- 
portant measures,  which,  in  addition  to  conferring  present 
benefits  upon  the  people,  will  also  contribute  to  the  future 
welfare  of  the  country  upon  the  return  of  peace. 

A  more  deep  interest  is  felt  upon  this  subject  in  our 
commercial  cities  than  in  other  sections  of  the  Union. 
The  benefits  of  a  well-regulated  bankrupt  law  would  be 
confined  to  no  locality,  but  affect  all  parts  of  the  country. 
The  objections  to  such  an  act  are  chiefly  made  by  those 
who,  from  the  nature  of  their  pursuits,  are  least  conver- 
sant with  the  operations  of  commerce,  and  who  will  be 
the  least  concerned  in  the  proposed  change.  It  would  be 
conducive,  I  think,  to  the  common  weal  if,  on  this  point, 
something  were  yielded  to  the  mature  judgment  of  the 
people  in  those  places  which  are  chiefly  concerned  in  this 
subject — to  the  commercial  classes,  who,  by  their  energy, 
do  so  much  to  give  life  and  vitality  to  industry  and  pro- 
duction throughout  every  State.  Some  concessions  should 
be  made  by  each  for  the  common  good.  If  trade  and 
commerce  are  fettered,  a  corresponding  injury  is  felt  in 
the  agricultural  and  manufacturing  districts.  Every  por- 
tion of  the  country  looks  to  New  York  and  other  com- 
mercial cities  for  capital  and  business  facilities.  Stagna- 
tion or  paralysis,  to  whatever  extent  they  prevail  in  the 
great  emporiu,  injure  the  national  system  of  trade  to  its 
most  remote  extremities. 

The  enactment  of  a  just  bankrupt  law,  impartially  and 
by  proper  rules  regulating  the  relations  and  interests  of 
debtor  and  creditor,  has  demanded  the  attention  of  Con- 
gress ever  since  the  organization  of  our  Government  I 
deem  tin*  attention  of  the  House  is  now  especially  due  to 
the  subject  in  consequence  of  the  effects  produced  by  the 
present  rebellion,  the  ruin  of  many  honorable  and  loyal 
men,  who.  }>y  their  commercial  and  manufacturing  pursuits, 
promoted  in  better  times  the  prosperity  and  employment 
3f  labor  in  the  North,  contributing,  at  the  same  time,  no 
little  to  supply  the  necessities  and  comforts  of  life  to  the 


36  A  JUST  BANKRUPT  LAW. 

South,  thus  tending  to  unite  the  two  sections  of  our 
country  by  the  firm  bond  of  frequent  intercourse  and 
material  interests,  now  for  a  time  suddenly  snapped 
asunder  to  the  infinite  injury  of  the  States  composing 
this  Union,  and  of  the  world  itself.  The  rebellion  which 
we  are  struggling  to  repress  has  its  victims  not  only  on 
the  battle-field,  but  also  in  the  ranks  of  commerce.  The 
abundant  crops  of  the  North,  and  the  foreign  demand 
for  our  breadstuffs,  have  preserved  many  of  our  citizens 
from  the  experience  of  these  disasters — perhaps  from  a 
knowledge  of  their  existence.  In  other  cases,  the  manu- 
facture of  fire-arms,  clothing,  and  other  articles  necessary 
for  the  welfare  of  the  army,  or  progress  of  the  war,  has 
occasioned  a  local  and  limited  prosperity  ;  but  the  pressure 
caused  by  cutting  off  the  Southern  trade  increased  the 
mercantile  failures  so  greatly  that  in  the  aggregate  last 
year  they  exceeded  by  2,041,  or  more  than  40  per  cent., 
the  number  of  those  who  became  insolvent  in  the  great 
crisis  of  1857.  A  careful  estimate  of  these  failures  shows 
that  they  amounted  to  6,993  in  1861,  while  in  1857  they 
were  only  4,932.  In  this  calculation  those  only  are  in- 
cluded whose  separate  liabilities  amount  to  at  least  $5,000. 
Were  it  possible  to  enumerate  the  smaller  debtors,  who 
have  failed  from  the  same  causes,  the  aggregate  would  be 
enormously  increased.  We  cannot  restore  their  lost  wealth 
to  men  who  have  been  overwhelmed  by  calamities  which 
they  did  not  merit,  and  of  which  they  could  not  foresee 
the  origin  or  consequences,  but  it  is  at  once  our  duty  and 
our  wisest  policy  to  enable  those  who  are  thus  embarrassed 
and  are  willing  to  surrender  all  they  possess  on  earth  for 
the  benefit  of  their  creditors,  to  labor  again  with  renewed 
hopes  on  behalf  of  themselves  and  their  families,  thus 
also  contributing  to  the  enlargement  and  reinvigoration 
of  that  commerce  and  those  varied  industrial  callings  on 
which  the  collection  of  the  large  revenue  imperatively 
required  for  national  purposes  now  so  greatly  depends. 

Mr.  Chairman,  there  are  many  friends  of  the  Union 
in  the  Southern  States  who  have  lost  their  property 
through  their  loyalty  to  the  Constitution,  and  whose 
losses  we  should  endeavor  to  alleviate.  Whenever  peace 
is  restored,  the  solvent  merchant  of  the  South  will  no 


A  JUST  BANKRUPT  LAW.  37 

doubt  pay  his  obligations,  but  we  need  such  a  law  as 
shall  interpose  between  the  debtor  and  the  creditor  in  the 
South  as  well  as  in  the  North,  so  as  to  counteract  the 
tendency  of  popular  and  neighborly  feeling  to  do  injus- 
tice, and  favor  home  creditors  instead  of  those  residing 
at  a  distance,  or  in  other  States,  by  facilitating  preferen- 
tial or  fraudulent  assignments,  the  system  now  unfortu- 
nately prevailing.  In  this  way  creditors  will  receive 
their  just  proportion  of  whatever  assets  may  remain. 
The  same  laws  which  tend  to  create  general  dividends, 
and  to  make  men  honest,  will  operate  in  each  section  of 
the  Union  upon  the  same  human  nature,  and  tend  to  pro- 
duce the  same  results.  The  South  is  already  deeply  im- 
poverished, and  as  long  as  she  remains  so,  the  interests 
of  our  merchants  must  suffer  with  her.  On  the  return 
of  peace,  the  restoration  of  prosperity  to  all  parts  of  the 
Union  will  be  no  less  conducive  to  Northern  than  to 
Southern  interests.  A  humane  and  permanent  bankrupt 
law,  enacted  by  the  General  Government,  will  save  mil- 
lions of  dollars  to  the  Northern  creditors,  and  prevent 
endless  delay  and  litigation. 

In  1841  an  extra  session  of  Congress  was  called, 
chiefly  for  the  purpose  of  adopting  some  measures  of 
relief  for  the  embarrassed  condition  of  the  country,  and 
especially  for  the  relief  of  debtors.  In  my  judgment, 
this  class  of  our  fellow-citizens  never  deserved  our  atten- 
tion so  much  as  at  the  present  time.  Comparatively  few 
of  the  recent  insolvencies  have  resulted  from  headlong 
speculations  like  those  which  culminated  in  1837.  Many 
debtors  yet  remain  weighed  down  by  the  cares  and  diffi- 
culties caused  by  the  financial  embarrassments  of  1857, 
when,  in  eight  weeks  alone,  after  a  long-continued  expan- 
sion of  loans  and  the  circulating  medium,  the  banks  of 
the  city  of  New  York  called  in  twenty-one  millions  of 
bank  debt,  and  the  other  one  thousand  three  hundred  and 
fifty  banks  of  the  United  States  adopted  the  same  policy. 
The  revulsion  was  not  confined  to  this  country  or  this  con- 
tinent, but  swept  over  the  world,  and  was,  perhaps,  felt 
with  more  severity  by  other  nations  than  our  own. 
No  foresight  on  the  part  of  many  who  were  then  sub- 
stantial and  prosperous  men  of  business  could  have 


38  A  JUST   BANKRUPT   LAW. 

provided  against  the  complicated  disasters  of  that  year, 
rrudent  men,  engaged  in  their  ordinary  pursuits,  were 
struck  down  without  any  sufficient  warning,  and  many 
who  had  reason  to  believe  themselves  rich,  and  beyond  the 
reach  of  the  casualties  of  fortune,  suddenly  became  bank- 
rupts. But  while  the  number  of  those  who  were  reduced 
to  insolvency  is  greater  than  in  1857,  it  is  equally  certain 
that  the  sources  of  their  difficulties  were  unanticipated 
alike  by  the  Government  and  merchants  of  this  country. 
So  far  as  commercial  causes  alone  were  concerned  the 
prospects  of  a  successful  and  stable  business  were  seldom 
more  flattering  than  theirs  were  a  year  and  a  half  ago. 
The  causes  of  recent  insolvencies  are  for  the  most  part 
entirely  political,  and  the  unhappy  men  who  have  thus 
been  ruined  should  no  more  be  punished  for  these  misfor- 
tunes than  for  any  of  the  numerous  accidents  to  which 
mankind  is  liable. 

The  present  indebtedness  of  the  Southern  to  the  North- 
ern States  is  carefully  estimated  to  be  about  $300,000,000, 
of  which  $159,000,000  are  due  to  the  city  of  New  York, 
$24,100,000  to  Philadelphia,  $19,000,000  to  Baltimore, 
and  $7,600,000  to  Boston.  By  the  losses  thus  incurred 
many  men  of  honor  and  integrity,  whose  means  of  meet- 
ing all  their  pecuniary  engagements  were  as  little  doubted 
by  themselves  as  by  all  who  knew  them,  are  undergoing 
the  slow  torture  of  mercantile  failure,  hopeless  and  life- 
long if  they  are  not  relieved  by  the  Government  of  their 
country.  In  not  a  few  cases  the  amount  of  their  debts 
is  many  times  less  than  that  due  to  them  by  their  former 
customers  in  the  Southern  States.  Last  year,  in  the  city 
of  New  York,  nine  hundred  and  thirteen  mercantile 
houses  became  insolvent,  whose  separate  liabilities  were 
in  no  case  under  $50,000,  and  in  several  instances  amounted 
to  some  millions.  Out  of  two  hundred  and  sixty-six  lead- 
ing dry -goods  houses  reported  as  good  when  the  rebellion 
began,  only  sixteen  remain,  and  their  condition  is  preca- 
rious. These  firms  cannot  well  be  spared  from  our  com- 
mercial circles  at  this  present  crisis.  The  common  rules 
of  humanity  require  our  sympathy  in  their  behalf,  and  no 
less  do  justice  and  a  regard  for  the  interests  of  the  repub- 
lic require  that,  after  a  strict  examination  of  the  affairs  of 


A  JUST   BANKRUPT   LAW.  39 

each  insolvent,  if  he  uprightly  and  honorably  surrender 
his  property  for  the  benefit  of  his  creditors,  he  shall  be 
permitted  to  begin  the  world  anew. 

Sir,  it  is  a  striking  fact,  and  little  to  our  credit,  that 
while  in  most  respects  the  United  States  adopt  a  system 
more  lenient  to  the  debtor  than  that  existing  in  any  other 
nation,  they  should  not  have  adopted  such  measures  for 
exacting  j  ustice  to  creditors,  and  affording  relief  to  honest 
and  unfortunate  debtors,  as  England,  France,  and  most 
other  commercial  countries  have  long  ago  adopted  and 
found,  by  long-tried  experience,  to  be  at  once  expedient 
and  humane.  The  just  protection  of  the  weak  and  un- 
fortunate is  eminently  characteristic  of  our  institutions 
and  of  the  customs  and  wishes  of  our  people ;  and  yet 
no  wise  and  equitable  law  exists  by  which  each  bankrupt 
may  be  compelled  to  distribute  his  assets  fairly  and  im- 
partially among  his  creditors,  and  may  then  be  free  to 
devote  his  energy  and  ability  to  future  acquisitions.  Our 
States  have,  for  the  most  part,  long  ago  abolished  impris- 
onment for  debt,  but  we  yet  continue  to  treat  misfortune 
as  if  it  were  a  crime,  and  leave  debtors  as  prisoners  at 
large.  They  may  indeed  use  their  personal  labor  to  earn 
a  livelihood,  but  the  reward  of  successful  industry  arises 
far  more  from  savings  and  the  accumulation  of  capital 
than  from  labor  alone  ;  and  from  these  opportunities  they 
are  debarred.  The  hand  of  the  law  cuts  them  to  the 
quick  through  one  of  the  most  honorable  and  sacred  in- 
stincts of  our  nature,  by  disabling  them  from  making  any 
provision  for  their  families.  The  insolvent  debtor  can 
make  no  saving  for  the  support  of  himself,  his  wife,  and 
children  when  he  is  disabled  from  earning  the  means  of 
subsistence,  either  by  sickness,  or  by  those  natural  infirm- 
ities of  advanced  age,  to  which,  sooner  or  later,  we  must 
all  succumb.  All  savings  are  prohibited,  and  nearly  all 
hope  for  the  rest  of  his  life  is  destroyed.  Many  thou- 
sands of  the  most  deserving  of  our  fellow-citizens  are  in 
this  condition.  Many,  alike  from  the  liberal  enjoyment 
of  riches  and  from  moderate  competence,  have  thus  been 
reduced  to  poverty  and  want.  If  their  sufferings  affected 
themselves  alone,  or  arose  from  their  own  imprudence  and 
recklessness,  they  would  be  less  worthy  of  our  sympathy, 


40  A  JUST   BANKRUPT   LAW. 

but  they  blight  whole  families  and  arise  in  many  cases 
from  causes  which  no  ordinary  wisdom  could  have  fore- 
seen, yet  less  could  have  controlled.  Insolvency  among 
mercantile  men  is  one  of  those  calamities  of  which  it  may 
well  be  said  "  Let  him  who  thinketh  he  stand eth  take 
heed  lest  he  falleth."  The  various  casualties  arising  from 
commercial  changes,  the  dishonesty  of  employees,  losses 
by  fire  or  on  the  ocean,  or  through  civil  war,  make  daily 
additions  to  the  number  of  failures.  It  is  estimated  that 
throughout  our  great  commercial  cities  in  ordinary  times 
five  per  cent,  of  the  persons  engaged  in  business  fail  every 
year.  Ninety -five  per  cent,  of  our  chief  business  men  be- 
come insolvent  at  least  once  in  their  life-times,  and  most 
of  those  who  ultimately  succeed  have  at  some  time  passed 
through  the  same  ordeal  and  been  dependent  upon  the 
leniency  or  indulgence  of  their  creditors.  In  many — per- 
haps in  most — cases  the  honest  debtor  is  met  by  his 
creditors  in  the  spirit  of  justice.  Creditors  who  adopt 
this  line  of  action  will  surely  not  complain  of  a  law  mak- 
ing the  course  they  pursue  obligatory  upon  other  creditors, 
thus  preventing  fraudulent  and  preferential  assignments 
and  much  expensive  litigation  and  delay. 

Those  who  conscientiously  oppose  such  a  law  as  will 
tend  to  render  justice  to  both  parties  by  exacting  from 
the  debtor  all  he  possesses,  to  be  divided  equally  among 
his  creditors,  guarding,  by  stringent  and  effective  laws, 
against  fraud,  and  restore  him  again  to  active  life,  are,  I 
think,  influenced  rather  by  habit  and  custom  than  by  due 
consideration.  A  bankrupt  law,  properly  regulated,  is  a 
necessary  element  of  every  well-adjusted  commercial 
system.  Commerce  has  always  been  and  always  will  be 
attended  with  many  hazards.  In  an  early  period  of 
human  history,  before  credit  became  an  element  generally 
recognized  in  commercial  transactions,  and  when  the 
artificial  wants  of  the  people  were  few  and  unimportant, 
the  risks  attending  the  exchange  of  commodities  were 
chiefly  those  connected  with  carriage  from  place  to  place, 
including  dangers  from  the  elements  and  from  the  inva- 
sions and  robberies  incident  to  an  unsettled  condition  of 
society.  Trade  was  chiefly  limited  to  payments  in  hand. 
The  code  of  laws  was  founded  upon  principles  less  hu- 


A  JUST   BANKRUPT   LAW.  41 

mane  and  exalted  than  those  we  now  recognize  as  of  the 
Highest  Wisdom.  The  unfortunate  debtor  was  regarded 
as  a  criminal  who  could  only  discharge  his  obligations  to 
a  wronged  and  indignant  community  by  a  protracted  or 
life-long  confinement  in  prison,  or  by  becoming  a  slave 
for  a  term  of  years  or  for  life.  It  may  have  been  that 
the  losses  which  then  occurred  were  often  caused  either 
by  collusion  with  others  or  by  some  violation  of  common 
honesty,  In  our  time  we  have  ceased  to  hold  the  com- 
mon carrier  responsible  for  those  calamities  or  injuries 
which  are  caused  by  the  act  of  God  or  of  the  public 
enemy,  but  the  debtor  is  not  the  less  held  to  his  obliga- 
tions, although  the  losses  which  have  overwhelmed  him 
are  caused  by  war  or  rebellion,  or  by  those  natural  causes 
in  which  man  had  no  direct  or  immediate  agency. 

In  early  history,  the  annals  of  all  maritime  and  trading 
nations  are  red  with  the  blood  with  which  the  laws  as  to 
debtors  have  been  written.  There  was  a  period  in  Roman 
history  when  the  body  of  the  debtor  was  divided  among 
his  creditors :  and  in  our  century  and  time  he  has  been 
placed  in  close  confinement,  with  no  means  of  subsistence 
except  such  as  were  afforded  by  the  charity  of  friends,  as 
if  thus  he  would  be  enabled  to  discharge  his  debts  to  his 
creditors.  The  heart  sickens,  in  this  age  of  better  hu- 
manity, at  the  recital  of  those  disasters  which  in  former 
times  overtook  the  poor  delinquent  and  those  who,  under 
Providence,  were  naturally  depending  upon  him  for  sus- 
tenance and  support. 

The  history  of  Great  Britain  affords  us  many  instruc- 
tive suggestions  on  this  subject.  Occupying  only  a  nar- 
row territory,  her  commerce,  more  vast  than  was  ever  at- 
tained by  any  other  country,  is  supported  by  a  system  of 
credit.  The  most  close  investigation  of  economic  science 
and  a  careful  practical  application  of  sound  principles  are 
necessary  to  maintain  the  prosperity,  it  might  almost  be 
said  even  the  existence  of  her  people.  Her  credit  system, 
like  our  own,  is  liable  to  many  reverses,  which  the  records 
of  her  courts  of  bankruptcy,  stringent  as  they  are,  show 
to  be  unavoidable.  The  peculiar  hazards  necessarily 
attendant  upon  widely-diversified  commercial  operations 
early  induced  her  statesmen  to  turn  their  attention  to 


42  A  JUST  BANKRUPT  LAW. 

some  method  of  rapidly  and  certainly  distributing  the 
remaining  assets  of  insolvent  debtors.  Accordingly, 
about  the  year  1543  (35  Henry  VIII.),  more  than  three 
centuries  ago,  Parliament  enacted  the  first  bankrupt  law 
in  that  kingdom.  It  is  worthy  of  notice  that  early  legis- 
lation upon  this  subject  arose  from  a  regard  to  the 
interests  of  creditors  only.  It  was  intended  chiefly  to 
guard  against  the  frauds  which,  even  then,  and  under  the 
former  system  of  severe  punishment,  were  supposed  to 
account  for  a  large  proportion  of  the  failures.  It  had 
become  a  common  occurrence  for  delinquent  debtors  to 
flee  from  the  kingdom  in  order  to  avoid  the  imprisonment 
consequent  upon  failure,  taking  with  them  whatever 
valuables  they  could  carry;  and  the  first  enactments  of 
bankruptcy  were  for  the  purpose  of  preventing  these 
summary  and  inconvenient  methods  of  payment.  Severity 
towards  debtors  had  been  found  to  defeat  its  own  pur- 
poses. From  time  to  time  these  laws  had  been  modified 
for  the  benefit  of  debtors.  From  the  first  enactment 
of  a  bankrupt  law  in  England,  they  have  been  regarded 
as  necessary  parts  of  every  well-adjusted  commercial  code. 
The  broad  principle  is  fully  recognized  that  whoever 
shall,  in  good  faith,  surrender  all  his  property  for  the 
equal  benefit  of  his  creditors,  shall  be  discharged  from 
his  debts.  The  law  of  that  country  now  provides  both 
for  voluntary  and  compulsory  bankruptcy,  and  the 
interest  of  both  parties,  so  far  as  they  can  be  protected  by 
statutory  provisions. 

For  many  reasons,  a  bankrupt  law  is  more  necessary 
in  the  United  States  than  in  any  other  country.  Al- 
though we  rank  high  among  the  chief  maritime  and  com- 
mercial nations,  transacting  a  vast  trade  between  the 
different  States  of  our  own  Union,  and  a  widely-extended 
commerce  throughout  the  world,  our  business  is  done 
with  comparatively  limited  capital,  and  is,  therefore,  at- 
tended with  more  than  ordinary  hazard.  A  common 
spirit  of  enterprize  arises  from  the  general  intelligence  of 
our  people,  the  character  of  our  institutions,  and  the 
unlimited  resources  of  our  vast  territory.  But  here 
nearly  all  business  men  unavoidably  encounter  greater 
perils  than  in  European  nations.  The  financial  revulsions 


A  JUST   BANKRUPT   LAW.  43 

which  occur  in  all  commercial  countries  are  here  pecu- 
liarly severe.  Our  business  men  depend,  to  a  great 
extent,  upon  the  facilities  and  paper  money  furnished  by 
the  banks.  Great  fluctuations  continually  occur  in  the 
amount  of  the  currency,  loans,  and  discounts  obtained 
from  these  institutions.  Upon  this  subject  the  panic  of 
1837  is  suggestive.  In  January,  1834,  bank  loans  and 
discounts  amounted  to  $324,119,499,  but  in  the  corre- 
sponding date  in  1837  they  reached  the  amount  of  $5i)5,- 
115,702,  having  increased  more  than  60  per  cent,  in  three 
years. 

The  extraordinary  expansion  in  the  circulation  and 
loans,  stimulated  by  the  removal  of  the  public  deposits 
from  the  United  States  Bank  to  the  State  banks  in  Octo- 
ber, 1833,  led  to  a  great  increase  in  importations,  which 
rose  up  from  $108,118,311,  in  1833,  to  $189,980,035  in 
1836,  and  largely  affected  the  sale  of  public  and  other 
lands.  The  receipts  from  the  public  lands  in  1833  were 
$3,967,682,  and  in  1836  $24,877,179.  The  over-trading 
and  speculation  thus  engendered  were  brought  to  a  close 
in  1837,  by  the  "specie  circular,"  and  the  panic  of  that 
year  ensued,  resulting  in  the  suspension  of  specie  pay- 
ments by  the  banks  and  in  a  general  bankruptcy. 

Instead  of  a  natural  increase  in  the  loans  and  discounts 
of  the  banks,  in  accordance  with  the  increase  of  popula- 
tion and  the  exchangeable  products  of  the  country,  a 
decrease  continued  until  1843,  when  they  were  only 
$254,544,937,  or  less  than  half  of  the  amount  six  years 
before.  Not  until  1854,  a  period  of  seventeen  years,  did 
they  again  attain  the  same  amount  as  in  1837.  They 
then  had  gradually  increased  to  $684,456,887  by  January 
1,  1857,  but  in  the  year  following  were  suddenly  dimin- 
ished by  more  than  $100,000,000.  The*  circulation  in 
current  bank  notes  fluctuated  in  the  same  manner.  From 
$94,839,570,  about  January  1, 1834,  it  increased  to  $149,- 
185,890  in  1837,  decreased  to  $58,563,608  before  1843, 
then  gradually  increased  to  $214,778,822  at  the  begin- 
ning of  1857,  but  during  that  year  was  suddenly  dimin- 
ished by  about  $60,000,000,  or  nearly  one-third  its 
amount,  being  only  $155,208,344  on  January  1,  1858. 

The  financial  revulsion  of  1857,  the  effects  of  which 


44  A  JUST  BANKRUPT   LAW. 

are  yet  in  existence,  arose  from  causes  in  some  respects 
different  from  those  of  1837.  Until  1857  commerce  and 
bank  facilities  had  seemingly  kept  pace  with  the  popula- 
tion and  resources  of  the  country.  The  origin  of  these 
reverses  may  chiefly,  I  think,  be  traced  to  the  increased 
diversion  of  capital  from  its  legitimate  purpose  to  rail- 
road enterprises  and  Western  land  speculations.  Prior  to 
1858,  about  24,290  miles  of  railways  were  constructed  at 
a  cost  of  not  less  than  $1,000,000,000.  An  impetus  was 
thus  given  to  land  operations  along  the  lines  of  many 
new  routes  of  travel.  Prom  1854  to  1856,  inclusively, 
the  proceeds  from  land  sales  amounted  to  $20,404,691. 
No  less  than  26,691,670  acres  were  appropriated  to 
bounty  land  warrants  and  18,372,550  acres  more  were 
granted  by  the  34th  Congress  to  railroads. 

These  figures,  taken  from  the  financial  report  of  the 
Secretary  of  the  Treasury,  furnish  an  unerring  index  to 
some  of  our  commercial  revulsions.  The  system  should 
be  familiar  to  us  all.  For  many  consecutive  years  there 
is  a  gradual  increase  in  the  circulating  medium  and  in  the 
accommodations  of  the  banks.  When  the  crisis  ap- 
proaches money  is  said  to  be  abundant.  Those  who  re- 
ceive loans  from  the  banks  are  enabled  to  extend  their 
own  credit  and  give  credit  in  return  to  the  numerous  tra- 
ders, manufacturers,  and  adventurers  who,  in  this  country, 
are  never  at  a  loss  for  opportunities  of  speculations  or 
public  improvements.  Notes  of  hand,  mortgages,  stocks, 
and  even  real  estate  itself,  being  then  readily  convertible 
into  money,  become,  to  a  considerable  extent,  a  medium  of 
exchange,  and  swell  the  volume  of  the  currency.  The 
system  pervades  every  class  of  society.  Hope  and  inex- 
perience ever  suggest  that  the  new  prosperity  will  be 
permanent  and  progressive.  Each  epoch  presents  new 
features.  The  lessons  of  past  teachings  are  held  to  be 
inapplicable  to  the  present  time,  and  are  unconsidered, 
or  where  they  are  remembered,  the  days  of  adversity  are 
confidently  believed  to  be  remote.  Personal  property  of 
nearly  all  kinds  is  bought  and  sold  on  an  extended  system 
of  credit.  Stocks  are  negotiated  which  when  the  time  of 
pressure  arrives  are  swept  away  by  earlier  liens.  The 
amount  of  railroad  stocks  and  securities  alone,  which 


A  JUST   BANKRUPT  LAW.  45 

ceased  to  have  any  cash  or  negotiable  value  in  1857-58, 
is  believed  to  have  been  not  less  than  $500,000,000.  Real 
estate  is  often  bought  and  deemed  the  most  secure  invest- 
ment, a  quarter  or  half  the  purchase  money  being  paid 
down,  and  a  bond  ami  mortgage  given  for  the  bal- 
ance. The  mortgage  is  foreclosed  during  the  revulsion, 
at  a  sale  where  there  is  little  competition  or  none  at  all, 
and  the  mortgagor  is  held  for  the  remaining  balance  of 
the  debt.  In  many  cases  the  rent  of  costly  edifices  in 
large  cities  is  diminished  at  least  one-half  of  its  previous 
amount.  Public  works  are  suspended.  Manufactories 
are  stopped,  wholly  or  in  part ;  and  the  grain  itself,  which 
would  have  been  exchanged  for  other  products,  remains 
in  the  granaries  of  the  farmer  or  unthrashed  upon  the 
prairies,  for  need  of  the  requisite  money  or  mutual  confi- 
dence to  bring  it  to  market. 

Suddenly,  and  without  any  warning  intelligible  to  the 
public,  a  financial  collapse  occurs.  Men  whose  credit 
was  unimpeachable,  and  whose  pecuniary  responsibility 
was  as  little  doubted  by  themselves  as  by  others,  become 
unable  to  sell  their  property  or  negotiate  new  loans,  while 
they  are  required  to  pay  the  debts  they  have  already 
contracted.  Their  "  means  have  been  invested."  Tens 
of  thousands  become  insolvent  who  have  abundant  prop- 
erty to  pay  the  whole  of  their  debts,  if  it  could  be  sold 
at  the  average  price  of  the  few  preceding  years ;  but  the 
relative  value  of  money  and  of  property  has  been  changed. 
Frequently  creditors  are  willing,  under  such  circumstances, 
to  release  the  debtor  and  assist  him  with  credit  in  re- 
newed exertions,  but  their  good  intentions  are  frustrated 
by  others  who  insist  on  the  full  letter  of  the  law  which 
gives  them  their  pound  of  flesh,  and  continues  the  useless 
bondage  of  the  debtor.  He  is  free  to  go  where  he  chooses, 
but  he  can  accumulate  no  saving,  either  for  the  benefit  of 
his  family,  for  his  own  use  in  sickness  or  old  age,  or  as  a 
small  capital  by  which  he  might  be  enabled  to  pay  the 
debts  conscientiously  contracted  in  more  prosperous  times, 
with  full  belief  in  his  ability  to  pay  them.  He  is  like 
those  who  are  said  to  have  been  sentenced  laboriously  to 
draw  water,  pouring  it  into  empty  vessels  whence  it  es- 
capes as  quickly  as  it  enters.  Tnis  is  the  penalty  our 


46  A  JUST  BANKRUPT  LAW. 

laws  inflict  on  undeserved  pecuniary  misfortune.  No 
sooner  is  a  frugal  debtor  known  to  lay  aside  a  small 
surplus  from  his  earnings,  than  he  is  stripped  by  the 
creditor.  Hence  artifices  are  adopted.  Recourse  is  often 
had  to  indirect  ownership,  sometimes  involving  actual 
perjury  without  offending  against  legal  enactments,  but 
destroying  self-respect  and  inflicting  the  penalties  of  con- 
scious guilt  upon  the  perpetrator,  who  often  drifts  on 
gradually  through  much  suffering,  to  greater  and  greater 
demoralization.  His  family  is  reared  and  its  character 
formed  amid  a  cloud  of  adverse  circumstances.  If  we 
cannot  make  men  honest,  we  can  lessen  the  temptations 
which  often  lead  them  to  do  wrong. 

Let  us  see  who  is  benefited  by  the  laws  which  inflict 
so  much  misery  upon  debtors,  even  when  they  are  honest, 
and  upon  their  no  less  innocent  families.  The  percent- 
age of  debts  paid  out  of  insolvent  estates  is  larger  where 
bankruptcy  laws  exist.  The  experience  of  England  is 
conclusive  on  this  point,  for  the  chief  object  of  the  bank- 
rupt law  of  that  country,  found  by  the  experience  of  sev- 
eral centuries  to  be  attained,  is  to  render  the  estate  of  the 
bankrupt  available  in  liquidation  of  his  liabilities  before 
it  can  be  concealed  by  fraud  or  dissipated  by  bad  man- 
agement, or  other  means.  As  the  morals  and  philosophy 
of  trade  advanced,  it  was  found  that  humanity  to  the 
debtor  did  not  diminish  the  payment  of  debts,  but  had 
the  contrary  effect ;  and  then  the  present  creditable  sys- 
tem found  a  place  in  the  statute  books  of  England.  The 
creditors  at  once  receive  the  proceeds  of  the  bankrupt's 
estate,  and  he  is  wholly  released  from  his  liabilities. 

Business  men  of  the  widest  commercial  knowledge 
concur  in  the  belief  that  such  a  law  would  produce  good 
results  in  our  own  country.  The  belief  has  a  broad 
foundation  in  human  nature  itself.  The  first  intentions 
of  men  are  less  selfish  than  their  second  thoughts.  The 
trader  who  has  recently  become  insolvent  is  both  able 
and  willing  to  do  more  for  his  creditors  than  he  is  either 
able  or  willing  to  do  after  long  protracted  despair  and  in- 
solvency. Those  who,  for  commercial  purposes,  have 
made  this  subject  their  special  study  afiirm  that,  when- 
ever a  moderate  compromise  has  been  offered  immediately 


A  JUST  BANKRUPT  LAW.  47 

ifter  failure,  and  been  repelled,  in  hopes  of  obtaining  a 
setter  settlement,  the  creditors,  in  ninety  cases  out  of  a 
mndred,  would  afterwards  be  glad  if  they  could  com- 
Dromise  the  debt  at  a  smaller  percentage,  but  usually 
rail  to  realize  anything — the  debt  becoming  a  total  loss. 
An  attempt  to  settle  with  their  creditors  is  usually  one 
?f  the  first  efforts  on  the  part  of  those  who  become  insol- 
vent. If  the  debtor  fails  in  this  through  want  of  con- 
3urrence  among  his  creditors,  and  the  claims  against  him 
are  pressed,  he  foresees  long  years  of  thraldom  and  em- 
barrassment, and  his  next  impulse  is  to  secure  provision 
for  himself  and  family.  In  his  despair  of  meeting  with 
justice,  he  often  has  recourse  to  many  subterfuges,  few  of 
which  ever  reach  the  public  ear ;  but  the  common  course  is 
to  make  a  preferential  assignment,  permitted  by  law,  thus 
his  assets  in  the  hands  of 


one  or  more  friends, 

m  whom  he  hopes  to  obtain  employment  or  assistance 
in  business,  or  perhaps  support  and  money  from  the 
actual  proceeds.  The  remainder  of  those  to  whom  he  is 
indebted  remain  unsatisfied,  and  he  bids  them  defiance. 
Creditors,  on  the  other  hand,  fearing  assignments  of  this 
kind,  often  submit  to  compromises  which  they  know  to  be 
unjust.  A  proper  bankrupt  law  prohibiting  these  assign- 
ments would  diminish,  if  it  did  not  destroy,  such  dangers, 
and  thus  befriend  the  creditor.  In  many  cases  through 
these  assignments,  or  by  other  means,  the  debtor  is  tempt- 
ed to  keep  all  he  can  until  some  such  terms  as  he  thinks 
favorable  can  be  effected.  From  this  time  he  leads  a 
surreptitious  and  demoralizing  life.  Perhaps  one  credi- 
tor alone  objects  to  the  offers  made.  The  debtor  is  de- 
termined not  to  pay  one  unless  he  can  pay  all.  It  is 
necessary  his  family  should  be  maintained.  Time  passes, 
and  his  assets  are  diminished.  Often  the  creditor,  fear- 
ing preferential  assignments,  hesitates  to  use  legal  meas- 
ures. The  only  dividend  that  can  now  be  offered  seems 
paltry.  The  debtor,  finding  that  neither  the  world  nor 
the  world's  law  befriend  him,  and  believing  that  the 
bondage  of  debt  will  be  perpetual,  not  unfrequently  sets 
aside  the  common  restraint*  of  prudence  and  morality, 
and  becomes  an  incubus,  an  injury  to  society,  instead  of 
devoting  his  intellect  and  energies  to  its  benefit.  If  of  a 


48  A  JUST  BANKRUPT   LAW. 

nature  too  scrupulous  and  honorable  to  yield  readily  to 
temptation,  his  sufferings  are  severe  and  constant.  He 
endeavors  to  provide  for  those  dependent  upon  him,  but 
their  respect  for  him  is  diminished  by  his  own  loss  of 
conscious  independence,  and  the  change  experienced  in 
the  social  position  of  them  all,  arising  from  the  ne- 
cessity of  proper  retrenchment.  This  he  and  they  can 
meet,  but  society  always  attaches  a  certain  degree  of 
odium  to  the  insolvent,  who  in  his  turn  is  humiliated,  and 
often  so  far  depressed  that  he  resorts  to  dissipation  as 
the  means  of  finding  a  temporary  forgetfulness.  He  feels 
weak  and  degraded  in  the  eyes  of  that  little  domestic 
circle  of  his  wife  and  children,  of  those  whom  he  is  bound 
by  every  honorable  and  sacred  instinct  of  our  nature  to 
maintain  and  defend  at  all  legitimate  hazards,  by  the 
daily  labor  of  his  life,  receiving  in  return,  as  his  natural 
right,  the  cherished  equivalent  of  their  affection  and  re- 
spect. He  can  bestow  upon  them  nothing  more  than  a 
temporary  subsistence,  taking  care  at  best  that  he  never 
has  at  his  command  more  than  the  savings  of  a  limited 
number  of  days.  The  law  has  done  all  it  can  to  make 
honesty  no  longer  the  best  policy  for  him,  and  the  only 
hope  he  has  of  worldly  prosperity,  of  competence,  or 
of  maintaining  his  family  depends  upon  the  successful 
practice  of  dishonorable  concealments. 

It  is  urged  by  many  persons  that  the  bankrupt  act  of 
1841  was  unpopular,  and  led  to  the  overthrow  of  the 
party  that  was  chiefly  instrumental  in  its  passage.  I 
regard  such  an  objection  as  unworthy  of  statesmen  of 
wide  and  liberal  views,  who  comprehend  a  true  and 
enlarged  commercial  policy.  The  passage  of  that  act  was 
preceded  by  an  extraordinary  financial  panic,  resulting  in 
general  insolvency,  the  causes  of  which  I  have  briefly 
traced  already.  There  was  no  relief  for  these  bankrupts 
except  through  the  passage  of  such  a  law.  It  was  urged 
upon  exaggerated  grounds,  as  to  the  number  of  the  insol- 
vents and  the  amount  of  their  indebtedness,  and  formed 
a  part  of  the  series  of  financial  measures  of  the  party 
then  in  power.  Under  a  great  pressure  it  was  passed. 
It  was  objectionable  in  some  respects;  in  these  particu- 
lars it  could  have  been  afterwards  amended;  but  in  its 


A  JUST   BANKRUPT  LAW.  49 

nain  features  it  would  have  operated  beneficially.  As 
;oon  as  the  voluntary  applicants,  who  were  33,739  in 
lumber,  with  an  aggregate  indebtedness  of  $440,934,- 
>  15.01,  were  relieved,  or  in  the  process  of  relief,  the  law 
,vas  repealed — just  when,  through  the  involuntary  clause, 
t  would  have  become  serviceable  to  the  creditor,  con- 
tributed largely  to  prevent  future  panic,  and  exercised  a 
vvholesome  influence  upon  trade  and  commerce.  The  error 
vvas  not  in  the  passage  of  the  act  of  1841,  but  in  its  too 
sarly  repeal,  before  it  had  received  a  fair  trial. 

Another  prominent  argument  against  affording  relief 
:o  the  unfortunate  but  honest  debtor  who  has  become  the 
victim  of  casualties  which,  perhaps,  as  in  the  case  of  our 
present  war,  the  statesmen  and  Government  of  our 
country  were  unable  to  prevent  or  foresee,  is  founded 
upon  the  fact  that  the  assets  of  those  who  became  bank- 
rupt, under  the  law  of  1841,  yielded  only  a  small  per- 
centage to  their  creditors.  Merely  a  moment's  reflection 
would  be  sufficient  to  make  it  plain  to  any  man  that  the 
losses  then  brought  within  the  reach  of  statistical 
research  were  the  accumulated  losses  of  many  previous 
years,  created  under  the  operation  of  laws  like  those  now 
existing,  when,  as  now,  there  was  no  general  law  of  bank- 
ruptcy. No  such  enormous  aggregate  of  hopeless  debt 
could  have  been  accumulated  under  a  permanent  bank- 
rupt law.  In  almost  every  case  the  creditor  would  have 
compelled  an  equitable  distribution  of  the  estate  of  the 
insolvent,  before  it  was  dissipated  through  delay;  or  the 
debtor  would  have  availed  himself  of  the  prospects 
opened  to  every  honest  man  by  just  enactments,  before 
his  assets  had  been  so  fully  consumed'  or  squandered. 
These  losses  were  incurred  under  a  legal  system  per- 
mitting preferential  assignments,  and  thus  encouraging 
unjust  concealments.  Under  a  proper  system  the  cred- 
itor would  not  be  restrained  by  threats  from  enforcing  his 
claims,  but  would  compel  bankruptcy  and  obtain  a  divi- 
dend before  the  estate  could  be  concealed  by  fraud  or 
spent  in  the  maintenance  of  the  despairing  and  entram- 
melled  debtor. 

It  should  also  be  borne  in  mind  that  a  large  portion  of 
.he  liabilities  of  bankrupts  in  1841  was  created  in  the 
4 


50  A  JUST   BANKRUPT   LAW. 

purchase  of  unimproved  property,  partly  paid  for  in 
cash,  and  the  remainder  secured  by  bond  and  mortgage. 
After  the  panic,  the  mortgagor  failing  to  meet  the  prin- 
cipal, the  real  estate  was  sold,  and  bought  in  by  the 
mortgagee,  at,  in  many  cases,  less  than  the  amount  of  the 
mortgage;  thus  securing  his  cash  payment,  and  finally 
the  whole  property.  The  bankrupt  act  did  not  disturb 
prior  liens.  Again,  the  assets  were  put  up  at  auction  by 
the  general  assignee,  in  many  cases,  without  an  investiga- 
tion as  to  their  value,  and  were  bought  up  by  some 
friend  of  the  bankrupt  who  had  more  accurate  informa- 
tion as  to  them. 

Sir,  reckless  speculators  will  continue  to  encounter 
risks,  whatever  may  be  the  statutes,  but  the  history  of 
the  world  assures  us  that  the  most  flagrant  speculations 
have  occurred  where  insolvent  debtors  were  treated  as 
criminals.  We  are  yet  without  experience  to  guide  us  as 
to  the  comparative  percentage  paid  under  the  present 
system,  and  the  amount  that  would  be  paid  under  a  just, 
stringent,  and  permanent  law  of  bankruptcy ;  but  it  is 
worthy  of  note,  that  while  under  the  insolvent  laws  of 
England,  which  release  the  body  but  do  not  discharge 
the  debt,  few  dividends  are  made,  a  dividend  is  almost 
always  made  under  the  bankrupt  laws  which  encourage 
integrity,  by  permitting  the  debtor  to  have  brighter  pros- 
pects for  the  future,  by  releasing  him  alike  from  prison 
and  the  debt — giving  him  no  hope  of  prosperity  but 
through  perfect  honesty,  yet  allowing  him  through  this 
course  of  conduct,  a  relief,  complete  and  permanent.  Such 
laws  present  all  possible  motives  for  honesty,  and  power- 
ful incentives  to  abstain  from  fraud. 

Sir,  it  seems  to  be  a  just  view  of  the  case,  in  accordance 
with  the  opinions  usually  entertained  by  business  men, 
that  the  parties  to  commercial  transactions,  where  credit 
is  given,  are,  to  a  certain  extent,  adventurers  in  common. 
For  fraud  or  dishonesty,  the  guilty  should  be  punished— 
but  in  sales  on  credit,  the  risk  is  borne  by  each  party, 
although  not  in  equal  proportions.  The  vendor  enquires 
closely  as  to  the  pecuniary  means  of  the  purchaser,  his 
habits  of  life,  his  knowledge  of  business,  and  his  adapta- 
tion to  its  pursuits.  He  calculates  the  chances  of  his 


A  JUST   BANKRUPT  LAW.  51 

oistomer's  success,  by  inquiries  as  to  the  competition  he 
vill  experience,  his  practice  of  selling  on  time  or  on 
jredit,  and  by  information  from  all  possible  sources.  In 
his  case  he  may  be  regarded  as  an  insurer  of  his  own 
lel»ts,  and  generally  charges  his  debtor  a  higher  price 
ipon  credit  than  for  cash.  Hence  in  those  cases  where 
nisfortune  and  not  his  own  crime  has  overwhelmed  the 
lebtor,  he  should,  upon  surrender  of  his  effects,  meet  with 
in  honorable  discharge. 

Various  systems  of  insolvency  regulating  the  relations 
)f  debtor  and  creditor  prevail  in  different  States.  Special 
enactments  for  this  purpose  are  necessary  in  every  com- 
iiercial  community.  In  some  cases  his  present  assets  are 
listributed,  and  he  obtains  no  release  from  the  debt — his 
future  acquisitions  being  deemed  also  the  property  of  his 
creditors.  In  others  the  person  of  the  debtor  is  discharged, 
and  he  is  free  to  acquire  property  in  future,  if  a  specified 
proportion  of  his  creditors  vote  in  his  favor.  In  yet  other 
3ases  he  is  discharged  if  his  assets  pay  a  certain  percentage 
of  his  debts,  and  the  consent  of  his  creditors  is  not  essen- 
tial to  his  release. 

Insolvent  laws,  of  which  any  debtor  whether  imprisoned 
or  not  may  have  the  benefit,  exist  in  California,  Michigan, 
Ohio,  Indiana,  Louisiana,  Missouri,  Connecticut,  New 
York,  Massachusetts,  and  Rhode  Island.  Those  persons 
who  are  imprisoned  on  civil  process  are  alone  entitled  to 
relief  in  Delaware,  Maryland,  Tennessee,  North  Carolina, 
South  Carolina,  Georgia,  Alabama,  Mississippi,  Illinois, 
and  New  Jersey.  In  Maine,  New  Hampshire,  Kentucky, 
and  Virginia,  the  relief  is  confined  to  debtors  charged  in 
execution. 

In  California,  Michigan,  and  Massachusetts   statutes 

I  pro  vide  for  the  discharge  of  the  insolvent  from  the  debt 
itself  if  his  assets  are  assigned  and  distributed  among 
his  creditors,  while  in  many  other  States  his  person  only 
is  excepted.  In  the  State  of  New  York  the  insolvent 
la\\<  enable  the  debtor,  with  the  consent  of  "  two-thirds  in 
value"  of  his  creditors,  and  on  the  due  surrender  and 
disclosure  of  his  property,  to  be  discharged  from  all  his 
debts  contracted  within  the  State,  with  certain  exceptions. 
For  commercial  purposes  the  different  States  are  a  unit 


52  A  JUST  BANKRUPT  LAW. 

At  present  their  laws  do  not  extend  beyond  the  limits  of 
the  separate  States,  and  the  persons  subject  to  their 
separate  jurisdiction.  In  this  varied  legislation  of  the 
different  States  we  find  a  valid  reason  f or  comprehensive 
enactments.  A  law  which  will  embrace  the  whole  Union 
in  its  provisions  has  now  become  indispensable.  Nothing 
less  can  relieve  our  insolvent  citizens  from  the  heavy 
pecuniary  obligations  which  oppress  their  energies,  blight 
their  future,  and  deprive  the  country  of  the  benefit  of 
their  services  and  industry. 

It  is  estimated  that  the  aggregate  number  of  failures 
during  the  last  five  years,  considering  only  those  cases  in 
each  of  which  the  debts  amount  to  $5,000  or  more,  and 
leaving  out  the  numerous  class  of  insolvents  who  owe 
less,  is  nearly  twenty-five  thousand,  and  the  amount  of 
indebtedness  in  them  is  nearly  seven  hundred  and  fifty 
millions.  The  liabilities  last  year  alone  were  nearly  as 
large  as  in  the  preceding  three  years. 

Many  of  these  liabilities  have  been  discharged  by  vol- 
untary compromise,  but  this  condition  of  our  .commercial 
affairs  clearly  requires  the  intervention  of  Congress,  and 
this  honorable  body  will  fail  in  the  discharge  of  an  im- 
portant duty  if  it  does  not  perform  its  share  in  affording 
proper  relief. 

Upon  this  subject  some  differences  of  opinion  exist  be- 
tween the  commercial  and  agricultural  interests — the 
former  urging  a  bankrupt  law,  and  the  latter  inclining  to 
oppose  it.  I  see  no  good  ground  for  opposition.  Both 
parties  would,  I  think,  be  satisfied  with  such  an  act  as  in 
its  voluntary  provision  should  apply  to  all  persons,  but 
in  its  compulsory  clauses  only  refer  to  those  who  are 
merchants  using  the  trade  of  merchandise,  all  retailers  of 
merchandise,  bankers,  factors,  brokers,  underwriters  or 
insurers.  The  agricultural  interests  would  not  be  in- 
juriously affected  by  such  an  Act.  It  seems  to  me  that 
we  can  meet  upon  this  subject  in  a  spirit  of  harmony, 
and,  without  the  imaginary  rivalry  of  different  interests, 
adopt  some  suitable  measure  that  will  do  justice  to  that 
class  of  our  citizens  in  whose  behalf  I  now  appeal  to  this 
honorable  body. 

Society  itself  has  at  all  times  an  interest  in  the  subse- 


A  JUST  BANKRUPT   LAW. 


53 


}uent  life  and  exertions  of  the  bankrupt.  The  hope  or 
Bxpectation  of  future  acquisition,  by  conducing  to  the  in- 
lustry,  honesty,  and  morality  of  the  unfortunate  debtor, 
3ontnbutes  to  the  welfare  of  the  community.  A  due 
regard  for  the  public  good  demands  that  the  future  acqui- 
sitions of  the  debtor  who  has  faithfully  surrendered  all 
he  owned  for  the  benefit  of  his  creditors,  should  be  placed 
under  his  own  control,  and  fully  justifies  prudent  and 
2areful  enactments  for  that  purpose. 


A  JUST  BANKRUPT  LAW. 

ITS   PRESENT  NECESSITY  AND   IMPORTANCE   AS  A 
PERMANENT  ACT. 


HOUSE  OF  REPRESENTATIVES,  June  3,  1864. 


Although  the  necessity  of  a  bankrupt  law  was  sufficiently  ob- 
vious, its  passage  was  so  vigorously  opposed  that  it  was  not  secured 
without  persevering  support.  At  the  close  of  the  debates  at  this 
time,  a  few  minutes  were  yielded  to  Mr.  Ward.  Having  already 
presented  the  subject  almost  exhaustively,  little  remained  to  be 
done  except  to  review  the  remarks  of  his  opponents  and  recapitu- 
late the  arguments  he  had  advanced,  and  which  remained  unan- 
swered. 

MB.  SPEAKER  :  I  am  indebted  to  the  courtesy  of  the 
gentleman  from  Ohio  for  the  opportunity  of  making  a  few 
remarks.  I  feel  very  reluctant,  having  of  late  been  so 
frequently  before  the  House,  to  occupy  its  time  now,  nor 
would  I  do  so  if  this  were  not  a  subject  vitally  affecting 
commercial  and  manufacturing  interests  of  the  city  which 
I  have  the  honor  in  part  to  represent.  The  large  cities  will 
be  much  more  affected  than  the  agricultural  districts  by 
the  passage  of  a  bill  of  this  character ;  but  a  just  and 
reasonable  settlement  of  the  questions  involved  must  be 
beneficial  to  all  parties  of  the  community,  and  I  hope  this 
Congress  will  have  the  honor  of  passing  a  bill  that  will 
relieve  a  large  number  of  well-disposed  but  insolvent 
debtors  from  a  bondage  so  nearly  akin  to  slavery. 

I  have  already,  during  the  last  session  of  Congress,  ad- 
dressed the  House  at  length  on  this  topic.  The  members 
of  this  honorable  body  do  not  often  look  into  the  details 
of  statistics  on  a  subject  of  this  kind,  and  I  feel  it  my 
duty,  not  only  to  this  House,  but  to  my  constituents,  to 
present  briefly  some  of  the  main  facts  to  be  considered  in 
this  connection. 


A  JUST   BANKRUPT  LAW.  55 

A  large  number  of  those  who  will  be  relieved  by  the 
oassage  of  this  act  became  bankrupt  from  causes  origin- 
iting  in  the  present  war ;  from  causes  which  they  could 
lot  foresee  and  over  which  they  could  not  possibly  exert 

any  control. 

*  ***** 

It  has  been  urged  as  an  objection  to  the  passage  of 
this  bill  that  it  will  release  debtors  in  the  Southern 
States.  A  little  reflection  will  lead  us  to  the  conclusion 
that  as  the  principles  of  human  nature  are  nearly  the 
same  everywhere,  Northern  creditors  will,  on  the  restora- 
tion of  peace,  receive  a  larger  percentage  of  their  claims 
against  debtors  resident  in  the  South,  under  the  mingled 
operations  both  of  the  voluntary  and  compulsory  clauses 
of  this  national  bill,  than  if  the  laws  regulating  the  rela- 
tions of  debtor  and  creditor  are  left  subject  to  a  system 
of  preferential  assignments,  or  whatever  other  policy  may 

be  the  choice  of  State  or  local  governments. 

****** 

The  city  of  New  York,  from  its  commercial  character 
and  the  extent  of  its  business,  is  always,  in  every  mone- 
tary crisis,  the  largest  sufferer.  No  accurate  statement 
of  the  insolvencies  of  last  year  has  come  under  my  notice, 
but  the  amount  of  their  liabilities  is  computed  to  be  about 
$50,000,000.  I  think  it  will  be  readily  perceived  by  the 
House  that  this  enormous  aggregate  of  indebtedness  can 
never  be  relieved  except  by  means  of  a  general  law  in- 
cluding the  various  States.  In  the  absence  of  such  an 
act  the  energies  of  a  large  portion  of  the  people  are 
crushed.  There  are  probably  twenty  or  thirty  thousand 
individuals  in  this  country  who  are  now  unable  to  extri- 
cate themselves  from  the  evils  of  insolvency.  If  they 
could  be  discharged  by  a  full  and  fair  surrender  of  their 
assets  they  would  again  become  useful  members  of  the 
commercial  community. 

I  trust  that  the  House  will  pass  this  bill.  The  subject 
lias  been  fully  discussed  before  Congress  and  in  the 
country  at  different  periods,  and  such  a  measure  as  is 
now  proposed  has  with  scarcely  any  exception,  been  uni- 
\  <Tsally  approved  by  the  leading  organs  of  public  opinion 
throughout  all  parts  of  the  United  States. 


56  A  JUST   BANKRUPT  LAW. 

During  the  last  Congress  no  less  than  from  thirty  to 
forty  thousand  persons  petitioned  for  the  passage  of  a 
bankrupt  law.  I  am  satisfied  that  its  enactment  will 
benefit  creditors  as  well  as  debtors ;  for  the  very  moment 
that  the  avenue  to  escape  is  opened,  men  in  failing  cir- 
cumstances will  extricate  themselves  from  their  embar- 
rassments by  surrendering  their  property  for  the  benefit 
of  their  creditors,  and  thus  the  creditor,  instead  of  being 
paid  as  at  present  a  small  percentage  of  his  debt,  or  fre- 
quently none  at  all,  will  receive  a  much  larger  dividend, 
as  the  necessary  and  direct  tendency  of  the  proposed  law 
is  to  cut  off  the  system  of  preferential  assignments  yet 
permitted  by  law,  but  prejudicial  to  the  interest  of  cred- 
itors in  general,  and  frequently  adopted  by  debtors  be- 
cause no  other  means  of  escape  are  open  to  them. 

It  has  been  urged  as  an  objection  to  a  general  and 
permanent  law  of  bankruptcy  that  under  the  experimental 
and  temporary  law  of  1841  only  a  small  percentage  of 
dividends  was  paid  to  the  creditors.  To  arrive  at  a  just 
conclusion  on  this  point  it  is  necessary  to  remember  that 
for  a  long  period  before  the  passage  of  that  law,  including 
the  disastrous  year  of  widespread  insolvency,  1836-37, 
no  national  remedy  existed  for  the  relief  of  debtors.  In 
the  meantime,  for  the  purpose  of  maintaining  their  fam- 
ilies, insolvents,  having  no  legal  means  of  restoration  to 
an  honorable  position,  were  naturally  but  too  frequently 
induced  or  driven  to  resort  to  indirect  methods  of  con- 
cealing some  portions  of  their  property  which  had  thus 
become  gradually  exhausted,  so  that  when  the  law  was 
passed  there  were  few  assets.  A  permanent  law  tends  to 
produce  a  contrary  result,  and  to  prevent  the  waste  of 
assets,  both  b}^  its  compulsory  clauses  and  by  opening  out 
avenues  of  future  and  hopeful  employment  to  every 
debtor  who  passes  through  the  ordeal  with  an  unblem- 
ished reputation. 

I  regard  it  as  a  stigma  on  the  age  and  country  that,  af- 
ter we  have  abolished  imprisonment  for  debt,  and  done  so 
much  towards  enlarging  the  privileges  and  rights  of  debt- 
ors, we  should  not  have  a  bankrupt  law. 

It  is  often  said  that  if  a  man  in  failing  circumstances 
will  give  up  his  property,  his  creditors  will  release  him ; 


A  JUST   BANKRUPT   LAW.  57 

but  practically  it  is  well  known  that  there  is  seldom  a 
case  in  which  there  is  not  some  creditor  who  will  insist  on 
having  his  pound  of  flesh.  If  nine-tenths  of  a  man's 
creditors  are  willing  to  release  him  on  the  surrender  of 
his  property,  the  other  one-tenth  should  be  compelled  to 
acquiesce  and  not  force  the  debtor  to  pay  them  a  hundred 
cents  on  the  dollar,  to  the  injury  of  the  more  liberal  credi- 
tors, and  at  the  risk  of  forcing  the  debtor  to  the  adoption 
of  a  preferential  assignment,  or  some  other  arrangement 
equally  injurious  to  the  general  interests  of  his  just 
creditors. 

Every  member  of  this  House  is,  or  should  be,  familiar 
with  those  principles  of  legislation  which  are  to  be  con- 
sidered in  reference  to  a  bankrupt  law,  an  enactment  de- 
manded alike  on  the  grounds  of  expediency,  humanity, 
and  justice.  The  United  States  alone,  among  all  com- 
mercial nations,  refuse  this  measure  of  relief  to  the  hon- 
est but  unfortunate  debtor,  and  at  the  same  time  permit 
in  its  stead  a  system  of  preferential  assignments,  unjust 
to  the  creditor  and  demoralizing  to  the  public.  I  advo- 
cate no  new  and  untried  theory.  Legislation  which  has 
existed  for  several  centuries  in  England,  France,  and  the 
other  leading  nations  of  Europe,  where  it  has  been  found 
by  experience  to  attain  the  object  for  which  it  was  enact- 
ed, compelling  the  just  treatment  of  creditors,  and 
affording  relief  to  honest  and  unfortunate  debtors,  is 
worthy  of  our  most  earnest  and  respectful  considera- 
tion. It  is  far  more  needed  in  this  country,  where 
monetary  fluctuations  are  frequent,  unforeseen,  and  vio- 
lent, than  in  the  Old  World,  where  the  changes  of 
trade  are  less  common  and  embarrassing.  It  is  in  es- 
pecial accordance  with  the  spirit  of  our  institutions 
and  of  our  people,  who  desire  the  protection  of  the 
weak,  and  that  none  shall  be  hopelessly  oppressed.  In 
all  other  respects  our  laws  are  lenient  to  the  debtor.  But 

ilet  no  one  regard  this  side  of  the  subject  alone. 
The  interests  of  the  creditor  are  also  to  be  considered. 
It  is  proposed  to  render  the  estate  of  the  debtor  available 
in  payment  of  his  debts  before  it  has  been  dissipated  by 
bad  management  or  delay,  or  concealed  by  fraudulent 
contrivances.  The  creditor,  as  soon  as  due  investigation, 


58  A  JUST   BANKRUPT  LAW. 

just  to  all  parties  concerned,  can  be  had,  is  to  receive  his 
share  of  the  bankrupt's  estate  ;  and  if  there  has  been  no 
profligacy,  no  culpable  carelessness,  nor  any  attempt  at 
fraud  on  the  part  of  the  debtor,  he  is  set  free  once  more 
to  resume  his  accustomed  labors  for  the  benefit  of  his 
family  and  society.  This  course,  while  it  is  more  profit- 
able to  the  creditor  and  more  humane  to  the  debtor  than 
the  customs  already  prevailing,  tends  also  to  create  and 
maintain  a  higher  standard  of  mercantile  integrity  and 
honor — a  possession  of  inestimable  value  to  the  nation. 

The  number  of  debtors  who  became  insolvent  in  the 
Northern  States  in  1861,  the  first  year  of  the  war,  was 
nearly  six  thousand,  more  than  double  the  number  of 
the  same  class  in  each  of  several  previous  years.  These 
people  were  the  victims  of  casualties  which  neither  they 
nor  the  statesmen  and  Government  of  our  country  were 
able  to  foresee.  At  other  times  the  sudden  contraction 
of  paper  money  and  banking  facilities,  after  a  long  peri- 
od of  expansion  and  easy  credit,  has  produced  unmeri- 
ted calamities  like  those  by  which  merchants  and  others 
dependent  upon  the  Southern  trade  were  overwhelmed  in 
that  truly  calamitous  year.  It  is  our  duty  to  provide  for 
these  people  a  ready  and  legitimate  method  of  extrication 
from  their  difficulties.  They  have  been  left — the  victims  of 
the  war — wounded  and  disabled  on  the  field  of  commerce. 

I  am  satisfied  that  no  law  which  it  is  in  the  power  of 
Congress  to  pass  will  be  more  acceptable  to  the  people, 
or  more  beneficial  to  the  countiy,  than  the  one  now  under 
consideration.  I  therefore  hope  it  will  be  promptly  pass- 
ed. I  now  move  the  previous  question. 


OUR  COMMERCIAL  RELATIONS 

WITH 

THE    BRITISH    NORTH    AMERICAN    PROVINCES. 


HOUSE  OF  REPRESENTATIVES,  May  18,  1864. 


The  treaty  for  promoting  commerce  with  the  British  North 
American  Provinces  caused  an  enormous  and  profitable  addi- 
tion to  our  trade  with  them ;  but  a  subsequent  increase  of  duties 
by  Canada,  and  other  injurious  enactments  on  her  part,  stimulated 
by  her  need  of  larger  revenue,  created  much  dissatisfaction  in 
the  United  States.  Under  these  circumstances  the  Legislature  of 
the  State  of  New  York  passed  concurrent  resolutions,  saying 
that  "free  commercial  intercourse  between  the  two  countries, 
developing  the  natural,  geographical,  and  other  advantages  of 
each  for  the  good  of  all,  is  conducive  to  the  present  interest  of 
each,  and  the  only  proper  basis  of  our  intercourse  for  all  time 
to  come."  The  resolutions  were  referred  by  the  Committee  on 
Commerce  to  Mr.  Ward,  and  he  sought  to  give  practical  effect  to 
their  principles  both  by  speeches  and  reports. 

MR.  SPEAKER:  Among  the  many  subjects  of  import- 
ance requiring  our  attention,  none,  except  those  immedi- 
diately  relating  to  the  deplorable  events  transpiring  in 
our  own  country,  so  justly  occupy  our  time  as  our  re- 
lations to  the  young  and  rising  nation  inhabiting  the 
territory  contiguous  to  our  own  on  the  north.  If  Mex- 
ico, our  neighbor  on  the  south,  ready,  perhaps,  to  form 
an  alliance  with  the  insurgent  States,  is  to  be  ruled  by  a 
power  hostile  to  us  and  our  institutions,  does  it  not  form 
a  proper  portion  of  our  public  policy  to  cultivate  the 
most  f riendly  relations  with  the  British  Colonies  ?  Mex- 
ico has,  it  is  true,  been  called  a  republic.  She  has 
striven  after  the  realization  of  popular  government,  but 
has  been  too  weak  to  attain  it.  The  result  has  been 
anarchy,  followed  by  her  falling  an  easy  prey  to  Euro- 


60  OUR  COMMERCIAL  RELATIONS  WITH   CANADA. 

pean  invaders,  insignificant  in  number  compared  with  her 
own  forces.  In  the  British  Provinces  the  principle  of 
government  by  the  people  through  their  representatives 
is  more  fully  acknowledged  than  in  any  country  of  mag- 
nitude except  our  own.  Already  they  contain  a  popula- 
tion more  numerous  than  all  the  free  inhabitants  of  the 
United  States  in  1790,  several  years  after  the  Revolu- 
tionary war  had  terminated  in  peace.  Their  territory  is 
capable  of  maintaining  in  affluence  a  population  much 
larger  than  ours  now  is.  Our  commerce  with  the  single 
province  of  Canada  alone  has,  for  the  last  five  years, 
been  larger  than  with  any  other  country,  excepting  Eng- 
land, France,  and  Cuba.  Can  there  be  any  doubt  that  it 
is  more  reasonable  to  attempt  by  negotiation  the  removal 
of  any  objectionable  features  which  may  have  arisen 
in  connection  with  the  existing  treaty,  than  to  disturb 
the  industry  and  investments  of  the  large  portion  of  our 
citizens  now  directly  or  indirectly  engaged  in  this  trade  ? 
Besides  the  limited  provisions  as  to  reciprocal  trade  and 
navigation,  the  treaty  settled  many  difficulties  which  had 
long  occupied  the  attention  of  our  statesmen.  The  free 
use  of  the  St.  John  River  was  considered  important  to  the 
eastern  lumber  trade.  But  the  most  pressing  and  urgent 
motive  undoubtedly  arose  from  the  value  of  the  fisheries 
near  the  maritime  Provinces,  and  the  imminent  probabili- 
ty of  hostilities  with  Great  Britain  unless  some  method 
could  be  devised  by  which  the  fishermen  of  the  United 
States  might  pursue  their  calling  on  those  coasts.  A 
large  number  of  our  fellow-citizens  are  engaged  in  these 
fisheries.  Their  lifetime  is  one  of  difficulty  and  peril. 
From  the  energy  and  character  formed  by  a  continual 
struggle  with  the  rough  elements  in  the  northern  seas 
spring  the  multitude  of  those  who,  through  their  uncon- 
querable perseverance  and  hardihood,  enrich  us  by  pro- 
moting our  foreign  commerce,  and  carry  our  nation's  flag 
into  the  ports  of  every  sea.  A  practical  acquiescence  had 
to  some  extent  been  given  to  our  limited  participation  in 
the  fisheries.  The  Provincial  coast  abounds  in  deep  bays 
and  inlets,  very  extensive,  and  forming  an  important  por- 
tion of  the  fishing  grounds.  It  was  claimed  by  Great 
Britain  that  as  she  had  jurisdiction  within  three  miles  of 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   61 

the  coast,  the  old-time  limit  of  cannon  shot,  the  distance 
should  be  measured,  not  along  the  shore,  but  from  cer- 
tain specified  and  prominent  headlands.  This  was  for  a 
long  time  an  essential  point  in  the  controversy. 

By  the  Convention  of  1818,  between  Great  Britain  and 
the  United  States  in  relation  to  the  fisheries,  we  re- 
nounced forever  any  liberty  theretofore  enjoyed  or 
claimed  by  American  citizens  to  take,  dry,  or  cure  fish 
on  or  within  three  marine  miles  from  any  of  the  coasts, 
bays,  creeks,  or  harbors  of  British  North  America,  but 
stipulated  that  they  should  have  forever,  in  common  with 
the  subjects  of  Great  Britain,  the  liberty  to  take  fish  of 
every  kind  on  certain  parts  of  the  coast  of  Newfound- 
land, around  the  Magdalen  Islands,  and  on  the  coast  of 
Labrador. 

Complaints  having  been  made  by  the  several  Colonies 
that  the  British  Government  did  not  enforce  the  pro- 
vision of  the  convention,  but  permitted  Americans  to 
encroach  upon  the  fishing  grounds  thus  renounced,  a  case 
was  prepared  in  1841  by  the  Legislature  of  Nova  Scotia, 
to  be  submitted  to  the  imperial  crown  officers;  and  the 
Advocate-General  and  Attorney-General  of  England 
gave  it  as  their  deliberate  opinion  that  "  by  the  terms  of 
the  convention,  American  citizens  are  excluded  from  any 
right  of  fishing  within  three  miles  from  the  coast  of 
British  America,  and  that  the  prescribed  distance  of 
three  miles  is  to  be  measured  from  the  headlands  or  ex- 
treme points  of  land,  next  the  sea,  of  the  coast,  or  of 
the  entrance  of  bays  or  indents  of  the  coast,  and  conse- 
quently that  no  right  exists  on  the  part  of  American 
citizens  to  enter  the  bays  of  Nova  Scotia,  there  to  take 
fish,  although  the  fishing,  being  within  the  bay,  may  be 
at  a  greater  distance  than  three  miles  from  the  shore  of 
the  bay ;  as  we  are  of  opinion  that  the  term  '  headland ' 
is  used  in  the  treaty  to  express  that  part  of  the  land  we 
have  before  mentioned,  including  the  interiors  of  the 
bays  and  the  indents  of  the  coast. 

The  Colonial  authorities  maintained  this  view  of  the 
case,  and  it  was  confirmed  by  Mr.  Webster,  then  Secre- 
tary of  State,  who,  after  quoting  the  first  article  of  the 
convention,  used  the  following  terms: 


62  OUR  COMMERCIAL  RELATIONS  WITH  CANADA. 

"  It  would  appear  that  by  a  strict  and  rigid  construction  of  this 
article,  fishing  vessels  of  the  United  States  are  precluded  from 
entering  into  the  bays  or  harbors  of  the  British  Provinces,  ex- 
cept for  the  purposes  of  shelter,  repairing  damages,  and  obtain- 
ing wood  and  water.  A  bay,  as  is  usually  understood,  is  an  arm 
or  recess  of  the  sea,  entering  from  the  ocean  between  capes  or 
headlands ;  and  the  term  is  applied  equally  to  small  and  large 
tracts  of  water  thus  situated.  It  is  common  to  speak  of  Hud- 
son's Bay,  or  the  Bay  of  Biscay,  although  they  are  very  large 
tracts  of  water. 

"  The  British  authorities  insist  that  England  has  a  right  to  draw 
aline  from  headland  to  headland,  and  to  capture  all  American  fish- 
ermen who  may  follow  their  pursuits  inside  of  that  line.  It  was 
undoubtedly  an  oversight  in  the  Convention  of  1818,  to  make  so 
large  a  concession  to  England,  since  the  United  States  had 
usually  considered  that  those  vast  inlets  or  recesses  of  the  ocean 
ought  to  be  open  to  American  fishermen,  as  freely  as  the  sea 
itself,  to  within  three  marine  miles  of  the  shore." 

It  would  be  difficult  to  devise  a  system  more  likely  to 
embroil  the  citizens  and  subjects  of  the  respective  coun- 
tries. From  the  nature  of  the  occupation  itself,  and  the 
natural  character  of  those  who  are  engaged  in  it,  frequent 
infringements  of  such  rules  would  arise.  The  precise 
distance  of  three  miles  could  seldom  be  readily  ascer- 
tained. Through  the  interests  of  men  and  the  ardor  of 
the  chase,  very  different  estimates  would  be  made.  A 
settlement  of  the  questions  regarding  the  fisheries  in  such 
a  way  as  to  give  peace  and  security  to  the  people  on  both 
sides  was  exceedingly  desirable.  The  British  authorities, 
at  the  instigation  of  the  Colonies,  insisted  upon  the 
strict  construction  of  the  convention,  which  had  long 
been  inoperative  or  partially  enforced.  Applications  for 
the  navigation  of  the  St.  Lawrence,  previously  granted  by 
courtesy,  were  withheld.  A  large  number  of  armed  ves- 
sels were  sent  by  Great  Britain  to  the  Colonial  stations. 
An  excited  state  of  public  feeling  prevailed.  Mr.  Web- 
ster gave  official  information  that  an  American  fishing 
vessel  had  already  been  taken  by  the  British  naval  force 
on  the  Provincial  coast.  Its  crew  were  carried  as  pris- 
oners into  a  British  port.  An  expedition  from  other 
American  vessels  had  hastily  been  armed  and  organized, 
and  had  forcibly  retaken  the  captured  vessel.  It  was 


OUR  COMMERCIAL   RELATIONS   WITH   CANADA.   63 

Deemed  prudent  by  the  statesmen  of  each  nation  to 
arrest  the  progress  of  events  which  might,  almost  at  any 
time,  have  precipitated  the  two  countries  into  war,  and 
if  possible,  to  prevent  their  recurrence  in  the  future. 
There  was,  as  the  present  Secretary  of  State  then  said, 
"  only  one  way  that  Congress  could  act,  and  that  was  by 
reciprocal  legislation  with  the  British  Parliament  or  the 
British  Colonies."  By  the  treaty  the  impending  dangers 
were  wisely  and  honorably  averted.  The  fish  cured  by 
the  Colonists  was  admitted  free  of  duty  into  our  mar- 
kets, and  we  acquired  for  our  fishermen  "  in  addition  to 
the  liberty  secured  to  them  by  the  above-mentioned  Con- 
vention of  October  20,  1818,  of  taking,  curing,  and  dry- 
ing fish  on  certain  coasts  of  the  British  North  American 
Colonies  therein  defined,  the  liberty,  in  common  with  the 
subjects  of  her  Britannic  Majesty,  to  take  fish  of  every 
kind,  except  shell-fish,  on  the  sea-coasts  and  shores, 
and  in  the  bays,  harbors,  and  creeks  of  Canada,  New 
Brunswick,  Nova  Scotia,  Prince  Edward's  Island  and  of 
the  several  islands  thereunto  adjacent,  without  being 
restricted  to  any  distance  from  the  shore,  with  permis- 
sion to  land  upon  the  coasts  and  shores  of  those  colonies 
and  the  islands  thereof,  and  also  upon  the  Magdalen 
Islands,  for  the  purpose  of  drying  their  nets  and  curing 
their  fish ;  provided  that  in  so  doing  they  do  not  inter- 
fere with  the  rights  of  private  property,  or  with  British 
fishermen,  in  the  peaceable  use  of  any  part  of  the  said 
coast  in  their  occupancy  for  the  same  purpose." 

Bills  of  reciprocity  had  from  time  to  time  been  pre- 
viously reported  to  the  House,  but  none  were  adopted. 
After  the  repeal  of  preferential  duties  favoring  Colonial 
produce  in  the  home  markets  of  Great  Britain,  measures 
for  its  f rec  admission  into  the  United  States  were  more 
strenuously  urged  on  behalf  of  the  Colonies.  The  name 
and  intent  ion  of  Reciprocity,  and  the  hope  of  approach 
to  a  system  which  could  not  fail  to  be  mutually  beneficial, 
were  hailed  with  delight  by  many  of  the  best  and  wisest 
of  the  nation.  The  plan  was  earnestly  advocated  on 
behalf  of  those  great  principles  which,  overlooking  sec- 
tional boundaries,  seek  to  allow  free  and  practical  scope 
to  the  natural  alliance  of  material  interests  with  the  most 


64   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

noble  and  benevolent  designs  of  public  or  international 
policy. 

The  British  and  Colonial  authorities  refused  to  nego- 
tiate on  the  subject  of  the  fisheries  or  the  navigation  of 
the  St.  Lawrence  apart  from  the  subject  of  our  commer- 
cial relations  with  the  Colonies,  and  they  were  all  included 
in  the  Treaty  of  1854. 

Our  commercial  relations  with  Canada  and  the  other 
British  possessions  in  North  America  have  been  viewed 
from  so  many  local  points — the  trade  of  one  city  or  dis- 
i/trict  has  so  often  been  considered  as  fairly  illustrating 
If  the  character  of  the  whole  commerce  between  us  and  our 
[neighbors  on  the  north — statistics  have  frequently  been 
*so  partially  examined  with  a  desire  to  vindicate  some 
foregone  conclusion  rather  than  to  discover  and  deduce 
the  truth — isolated  facts  have  been  reiterated  without 
due  regard  to  others  of  no  less  importance — that  few 
enter  upon  consideration  of  this  question  without  having 
formed  unjust  or  acrimonious  opinions  in  relation  to  it. 
I  do  not  believe  that  calm  argument,  and  candid,  patient 
investigation  are  inconsistent  with  those  just  conclusions 
on  all  international  subjects  which  are  essential  to  the 
greatest  prosperity  of  the  public;  or  that  it  is  more 
patriotic  for  us  who  have  been  sent  here  to  assist  in 
forming  laws  for  the  government  of  this  people,  to  be 
rigorous  and  special  advocates  of  some  preconceived 
opinions  or  local  interest  than  to  be  unbiased  judges 
desirous  of  promoting  the  interests  of  the  nation  at  large. 
I  would  be  influenced  by  no  hasty -opinion,  still  less  by 
any  inveterate  prejudice,  considering  details,  but  only  con- 
sidering them  in  connection  with  the  broader  views  relat- 
ing to  the  aggregate,  by  no  means  singling  out  especially 
for  attack  such  a  condition  of  international  trade  as  may 
be  presented  at  some  one  minor  point  of  entry,  but  in- 
cluding as  far  as  practicable  the  whole  commerce  of  the 
United  States  with  the  countries  whose  territory  extends 
far  beyond  our  own  on  the  north-east  shore,  and  follows 
inland  the  projection  of  Maine,  the  Great  Lakes  of  the 
interior,  the  wilds  of  our  extreme  north-western  Terri- 
tories, and  the  Rocky  Mountains ;  and  is  as  near  to  the 
gold-bearing  States  on  the  Pacific  as  to  New  England  and 


TJKIVF.KSITY 

OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   05 

the  Atlantic,  presenting  a  frontier  coterminous  with  our 
own  for  at  least  four  or  five  thousand  miles,  from  Maine 
to  Oregon. 

A  wide  spread  impression  as  to  the  operation  of  the 
treaty  has  been  created  by  imperfect  or  mistaken  repre- 
sentations. The  injury  wrought  by  them  is  not  confined 
within  these  walls.  The  people  look  to  us,  if  not  for 

fuidance,  at  least  for  the  results  of  careful  thought  and 
eliberate  investigation. 

It  is  essentially  the  nature  of  our  trade  with  the  Prov- 
inces that  our  exports  from  certain  Western  ports  should 
be  very  large  and  their  imports  comparatively  insignifi- 
cant, while  the  produce  from  these  regions  and  Canada  is 
poured  into  easterly  places  of  entry,  whence  scarcely  any 
exportation  of  the  same  articles  takes  place.  Hence,  on 
one  side,  the  amounts  of  our  sales,  which  are  supposed  to 
be  beneficial,  are  regarded  too  exclusively,  and  on  the  other 
our  purchases  are  chiefly  considered,  and  these  are  sup- 
posed to  be  injurious  to  our  interests,  in  accordance  with 
a  popular  but  erroneous  theory,  applying  to  great  inter- 
national questions  between  ourselves  and  foreigners  such 
principles  as  are  evidently  false  in  individual  transactions 
between  man  and  man.  We  must  consider  the  interests  of 
the  whole  country,  studying  the  facts  presented  by  the 
whole  case.  We  shall  then,  I  think,  be  led  to  the  conclusion 
expressed  by  the  concurrent  resolution  of  the  State  of 
New  York,  that  "  free  commercial  intercourse  between  the 
United  States  and  the  British  North  American  Provinces 
and  Possessions,  developing  the  natural,  geographical,  and 
other  advantages  of  each  lor  the  good  of  all,  is  conducive 
to  the  present  interest  of  each,  and  is  the  only  proper 
basis  of  our  intercourse  for  all  time  to  come."  Let  us 
approach  the  subject  of  our  relations  to  the  people  of 
these  countries  with  a  desire  to  comprehend  it  accurately 
and  fully  as  it  is,  and  a  conviction  that  errors  made  in  the 
spirit  of  liberality  and  friendship  are  less  likely  to  be  in- 
jurious than  the  perverse  misunderstandings  and  recrimi- 
nations which,  with  their  natural  results  of  hatred,  war, 
devastation,  and  bloodshed,  have  hitherto  contributed  the 
largest  portion  to  human  history. 
There  is,  I  think,  a  general  belief  that  the  balance  of 
5 


66   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

trade,  as  it  is  called,  is  against  us  in  our  intercourse  with 
these  Colonies,  but  the  statistics  recently  furnished  by  the 
Secretary  of  the  Treasury  show  that  during  the  period 
which  has  elapsed  since  the  treaty  went  into  effect,  and 
computing  up  to  as  late  a  date  as  our  authentic  records 
will  permit,  our  exports  to  the  provinces  have  been 
$171,628,779,  while  our  imports  have  been  only  $144,183,- 
096,  showing  that  we  have  sold  to  them  more  by  $26,445,- 
683  than  we  have  bought  from  them. 

It  appears  on  the  same  authority  that  while  the  amount 
of  our  exports  to  Canada  alone,  since  1855,  has  been 
$134,614,376,  we  have  imported  thence  articles  to  the 
value  of  $133,147,600,  leaving  a  balance  in  our  favor  of 
$1,466,776.  The  exports  of  1863  include  $3,502,180  of 
gold  coin.  If  there  were  no  balance  on  the  other  side, 
this  fact  would  be  unimportant.  The  articles  brought  to 
the  United  States  from  Canada  are  never  articles  of 
luxury,  but  of  the  plainest  and  most  absolute  utility,  for 
the  most  part  necessary  to  the  maintenance  of  human  life. 
Hence  they  are  intrinsically  more  valuable  than  the  pre- 
cious metals,  and  usually  may  be  readily  exchanged  in 
the  markets  of  the  world  either  for  specie  or  any  other 
commodity.  The  isolated  fact  of  this  exportation,  due  to 
the  peculiar  condition  of  our  currency,  was  eagerly  seized 
and  used  to  make  an  unfavorable  impression  upon  the 
public  mind.  As  the  statistics  of  the  Canadian  Govern- 
ment credit  us  with  some  such  amount  as  I  have  named, 
it  was  inferred  at  once  that  our  exports  to  that  Province 
alone  are  annually  $10,000,000  in  gold  or  its  equivalent. 
It  needed  only  a  little  breath,  a  few  words,  ready  self- 
deception,  bold  assertion,  with  sufficient  confidence  in  the 
credulity  of  the  public,  to  expand  a  statement,  itself  im- 
perfect .and  erroneous,  into  a  bubble  of  these  vast  propor- 
pon  this  airy  inundation  were  erected  batteries 
~oT  In  vective  against  the  treaty,  as  if  by  some  means  we 
had  been  robbed  of  our  just  rights  by  the  Canadians; 
and  a  vivid  picture  was  drawn  of  the  canals  which  they 
had  widened  and  the  railroads  they  had  constructed 
through  their  forests,  with  the  unjust  proceeds  of  the 
robbery.  In  view  of  our  temporary  need  of  many  arti- 
cles in  the  present  national  crisis — for  instance,  to  supply 


OUR  COMMERCIAL  RELATIONS    WITH   CANADA.   67 

our  cavalry  with  horses  and  the  grain  most  suitable  for 
their  maintenance— I  should  not  deem  it  inconsistent  with 
sound  political  economy  to  purchase  them  with  the  metal 
so  abundantly  supplied  by  our  inexhaustible  mines. 
Nearly  the  whole  trade  between  the  two  countries  is  car- 
ried on  by  means  of  gold  and  silver  or  their  equivalent  in 
bills  of  exchange,  or  paper  money  redeemable  in  specie. 
For  these  reasons  the  exportation  of  three  millions  and  a 
half  of  dollars  in  specie  is  not  much  to  be  regretted,  but  the 
persistent  habit  of  regarding  one  side  only  is  deeply  to 
be  deplored.  It  led  to  oversight  of  the  fact  that  during 
the  year  in  question  we  imported  through  Champlain 
alone  nearly  five  millions  of  dollars  in  coins  of  the  pre- 
cious metals. 

The  balance  of  trade  represents  in  the  main  the  amount 
of  gold  and  silver  or  their  equivalents  sent  from  one  coun- 
try to  another ;  and  between  us  and  the  Provinces,  since 
the  treaty  went  into  operation,  that  balance  has  been  more 
than  twenty-six  millions  of  dollars.  Under  the  influence 
of  an  animus  unfavorable  to  fair  discussion  the  error 
loomed  up  into  gigantic  proportions,  and  it  was  stated 
and  sent  forth  to  the  nation  that  no  other  country  presents 
so  unfavorable  a  balance-sheet  with  us.  This  method  of 
reasoning  is  little  adapted  to  promote  the  interests  of  our 
people  or  to  increase  their  political  intelligence,  and  more 
than  likely  to  diminish  the  respect  and  good-will  enter- 
tained towards  us  by  the  people  of  other  countries. 

I  may  well  be  excused  from  further  reference  to  the 
errors  with  which  the  subject  has  been  invested.  It 
is  better  to  examine  the  results  and  character  of  the  trade 
itself,  considering  how  far  reciprocity  and  mutual  benefit 
dp  or  do  not  exist  in  our  relations  with  the  Provinces, 
than  to  follow  to  their  end  the  delusive  arguments  of 
those  who  are  opposed  to  the  principle  itself. 

I  have  the  satisfaction  of  knowing  that  this  is  no  party 
question,  and  that  many  gentlemen  on  the  other  side  of 
the  House  unite  with  me  in  efforts  to  establish  or  extend 
such  a  liberal  policy  towards  the  Provinces  as  shall 
mutually  benefit  both  of  us,  knitting  us  together  by  the 
bonds  which  are  of  all  the  most  powerful,  those  of  mutual 
:  est,  well  judged,  in  necessary  conformity  to  higher 


G8   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

principles.  I  am  less  desirous  of  an  union  of  the  govern- 
ments than  for  an  union  of  the  people.  I  do  not  wish  to 
admit  into  our  family  of  States  any  who  are  not  imbued 
with  the  spirit  of  our  institutions,  and  do  not  appreciate 
as  we  do  the  benefits  resulting  from  them,  or  the  principles 
on  which  they  are  established.  Prudent  men  of  business 
are  not  accustomed  in  buying  and  selling  to  limit  their 
transactions  to  those  who  hold  the  same  political  or 
religious  opinions  as  themselves.  There  is  no  need  for 
the  habitant  of  Lower  Canada  to  quarrel  with  the  staple 
article  of  his  food  because  it  is  made  from  wheat  grown 
in  Iowa,  Wisconsin,  or  Illinois,  or  for  the  workman  in  the 
factories  of  New  England  to  ask,  for  conscience'  sake  or 
for  the  sake  of  his  country,  whether  the  white  loaf  or 
biscuit  ornamenting  his  table  is  the  product  of  the 
golden  grain  which  once  waved  on  the  fields  of  Upper 
Canada. 

The  facts  carefully  collected  by  the  Provincial  govern- 
ments fully  concur  with  our  own  in  proving  that  an 
immense  amount  of  benefits  has  accrued  to. the  people  of 
both  countries  by  the  increase  of  their  respective  freedom 
through  the  yet  limited  removal  of  artificial  obstacles  to 
their  intercourse.  Upon  the  plainest  principles  of  com- 
merce, the  individual  transactions  constituting  the  vast 
aggregate  of  this  trade  since  1855,  and  amounting  to 
more  than  fifty  millions  of  dollars  in  1863  alone,  must 
year  after  year  have  been  sufficiently  profitable  to  re- 
munerate those  who  produced  the  substantial  materials 
of  the  exchanges  and  those  who  were  engaged  in  the 
traffic,  who,  in  their  turn,  could  not  have  continued  their 
business  if  they  had  not  found  in  the  people  at  large 
customers  or  consumers  who  were  benefited  by  the  pur- 
chases they  made. 

The  treaty  was  dated  June  5,  1854,  and  its  salutary 
effects  were  partially  experienced  during  that  year.  Our 
exports  to  the  Provinces  during  the  seven  preceding  years 
have  been  multiplied  nearly  three-fold  in  the  seven  years 
which  have  elapsed  since  the  treaty,  having  been  $69,686,- 
107  in  the  former,  and  $171,628,779  in  the  latter  period  ; 
while  our  imports  from  the  same  regions  have  increased 
more  than  four-fold — having  been  $34,815,885  in  the 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   09 

former  period,  against  8145,183,096  in  the  seven  years 
since  the  treaty  went  fully  into  effect. 

Taking  a  general  view  of  the  subject  commercially 
considered — showing  the  results  in  the  aggregate  with- 
out entering  into  special  and  partial  details — it  does  not 
appear  that  the  system  as  a  whole  is  one  of  mere  favor 
to  our  northern  neighbors  or  of  injury  to  ourselves. 

It  is  to  be  expected  that  of  the  raw  or  unmanufactured 
products  of  the  field,  the  forest,  and  the  sea,  computed 
altogether,  the  Provinces  will  sell  more  to  us  than  we  can 
sell  to  them.  This  naturally  arises  from  the  maritime 
position  of.  the  Eastern  Provinces,  and  because  the  Prov- 
inces stand  in  much  the  same  relation  to  the  United 
States  as  that  occupied  by  the  new  Western  States  to  the 
older  settlements  in  the  East.  We  receive  from  them  the 
products  free  under  the  treaty  to  a  greater  extent  than 
similar  articles  are  exported  to  them  in  return,  but  may 
reasonably  expect  to  make  up  the  deficiencies  by  selling 
more  manufactures  and  commodities  of  tropical,  Asiatic, 
or  other  foreign  origin,  either  the  products  of  our  own 
labor  or  brought  from  over  the  seas,  chiefly  in  American 
vessels,  and  purchased  to  a  considerable  extent  with  the 
manufactures  or  productions  of  this  country ;  thus  em- 
ploying and  enriching  our  manufacturers,  merchants  and 
commercial  marine.  We  find,  in  accordance  with  'this 
view,  that  from  these  sources  we  have  exported  to  the 
Provinces  an  amount  which,  added  to  that  of  the  raw 
material  sold  by  us  to  them,  is  sufficient  to  make  up  the 
balance  of  $26,445,683,  during  the  period  in  considera- 
tion, more  than  we  have  bought  from  them — a  sum  which 
has  been  paid  in  specie  or  its  equivalent. 

The  value  of  the  foreign  merchandise  (exclusive  of 
articles  passed  through  the  United  States  in  bond)  ex- 
ported by  us  to  the  Provinces  during  the  seven  years  im- 
mediately following  the  ratification  of  the  treaty,  was 
$31,366,236 — purchased  chiefly  with  productions  of  the 
United  States,  and  which  yielded  employment  to  the. 
fanner  and  manufacturer,  shipper  and  sailor,  as  well  as 
profit  to  the  merchant.  The  amount  of  our  exports  of 
manufactures  and  other  articles  of  United  States  origin, 
not  included  in  the  treaty,  is  officially  stated  to- have  been 


70  OUR   COMMERCIAL   RELATIONS   WITH  CANADA. 

$47,269,139,  during  the  first  six  years  after  it  went  into 
effect. 

When  investigating  this  question  it  is  necessary  to  re- 
member the  peculiar  relations  of  the  Provinces  to  each 
other,  and  to  the  mother  country.  Although  owing  in 
common  a  political  allegiance  to  one  sovereign,  each  of  the 
colonies  is,  in  fact,  an  empire  within  an  empire,  having  a 
legislature  of  its  own.  Each  of  them  has  a  separate  tariff, 
and  charges  the  same  duties  upon  the  products  of  the  others, 
and  of  Great  Britain,  as  upon  those  of  foreign  countries. 
Their  union  is  political,  but  not  commercial ;  and  the 
treaty  received  the  sanction,  not  only  of  the  British 
Government,  but  of  the  colonial  legislatures  of  Canada, 
New  Brunswick,  Nova  Scotia,  Prince  Edward's  Island 
and  Newfoundland.  So  far  as  I  have  been  informed,  the 
results  of  the  treaty  with  those  colonies,  which  for  the 
sake  of  distinction,  may  be  termed  the  "Maritime 
Provinces,"  have  been  satisfactory,  although  as  to  them, 
it  should  be  regarded  as  neither  complete  nor  final  in  itself, 
but  as  only  one  link  in  a  chain  of  events,  permitting  the 
people  of  both  countries  to  perceive  more  clearly  the 
benefits  of  mutual  intercourse,  and  to  start  with  increased 
probabilities  of  success  towards  a  system  of  unfettered, 
absolute  and  complete  reciprocity,  so  that  each  may  enjoy 
fully  the  natural  advantages  of  friendly  neighborhood  to 
the  people,  territory- ,  and  possessions  of  the  other. 

Of  all  the  Provinces,  Canada  is  much  the  most  im- 
portant. In  1860,  the  inhabitants  of  them  all  numbered 
3,253,000.  Of  these,  more  than  2^500,000  constituted 
the  population  of  Canada,  and  less  than  700,000  that  of 
the  others.  This  Province,  projecting  from  the  northern 
extremity  of  Maine,  southerly  to  Detroit,  and  thence 
northerly  as  far  as  any  considerable  settlements  are  to  be 
found  near  our  frontier,  occupies  a  position  whence  the 
best  route  for  passengers  and  freight  to  the  ocean,  and  by 
that  common  highway  to  other  parts  of  the  world,  for 
the  whole  year  is  through  the  territory  of  the  United 
States.  For  nearly  half  the  year,  when  owing  to  a 
rigorous  climate  the  river  St.  Lawrence  is  impassable,  the 
only  practicable  means  of  intercourse  for  Canada  with 
other  nations  are  through  this  country.  Different  routes 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   71 

3f  communication  may  be  opened  through  the  Maritime 
Provinces,  but  none  of  them  can  permanently  be  so 
beneficial  as  the  lines  of  travel  leading  to  the  great 
natural  centres  of  the  commerce  and  shipping  of  this 
continent — the  Northern  American  cities  on  the  Atlantic. 
Nor  are  those  facilities  unimportant  to  the  United  States, 
which  would  create  a  free  right  of  way,  unquestioned, 
and  unencumbered  by  forms,  across  the  large  peninsula 
of  Upper  Canada,  separating  several  of  the  North-western 
and  grain-producing  States,  together  with  a  vast  area  of 
fertile  territory  yet  unoccupied,  from  the  commercial  and 
manufacturing  regions  in  the  East.  Canada  also  extends 
up  the  St.  Lawrence  on  both  sides  for  several  hundreds 
of  miles  of  the  ocean.  Hence,  mutual  rights  of  transit 
are  exceedingly  advantageous  to  both  countries,  and  our 
commercial  relations  with  this  Province  are  worthy  of 
special  consideration. 

General  dissatisfaction  with  the  treaty  exists  along  the 
whole  of  our  northern  frontier  near  Canada,  and  the 
moral  and  political  effects,  which  it  was  hoped  would 
result  from  it,  have  been  destroyed — the  effect  of  the 
Canadian  tariffs  enacted  since  1855  having  been  to  de- 
crease very  materially  the  amount  of  manufactures  and 
goods  of  foreign  origin  sold  by  the  people  of  this  country 
to  those  of  the  Provinces.  This  alone  constitutes  a 
sufficient  reason  for  a  revision  of  our  mutual  commercial 
relations,  so  that  our  manufacturers  may  not  only  receive 
from  the  regions  on  the  North  of  us,  a  considerable  portion 
of  their  necessary  supplies  of  timber,  breadstuffs,  and 
animal  food,  but  may  also  enjoy  a  less  restricted,  and  if 
practicable,  an  entirely  free  market  for  the  products  of 
their  labor. 

During  the  last  five  years  the  manufactures  of  the 
United  States,  exported  to  Canada,  have  in -the  aggregate 
decreased  from  $4,185,516  in  1858-9,  to  $1,510,802  in 
1862-3,  and  although  the  fluctuations  in  our  own  currency, 
and  the  scarcity  of  labor  arising  from  the  war,  have 
tended  to  produce  this  result,  there  can  be  no  doubt  that 
the  chief  cause  of  this  important  change  is  to  be  found 
in  the  increased  tariffs  of  Canada,  by  which  the  duties  on 
many  articles,  such  as  are  manufactured  in  the  United 


72   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

States,  have  been  gradually  increased  since  the  time  when 
the  treaty  was  made,  when  those  chiefly  levied  on  such 
imports  into  Canada  were  12^  per  cent.,  but  have  since 
been  changed,  and  are  now  at  rates  varying  from  10  to 
20,  25,  and  30  per  cent.  In  some  instances,  such  as  cigars 
and  spirituous  liquors,  a  higher  rate  is  levied. 

The  effect  of  these  duties  is  to  permit  the  importation 
of  British  and  French  manufactures  of  the  finer  qualities 
into  Canada  as  heretofore,  but  to  stimulate  the  home 
production  of  goods  of  the  coarser  and  more  substantial 
qualities,  such  as  those  of  the  United  States  chiefly  are. 
Canada  cannot,  even  under  a  high  tariff,  compete  with 
the  nations  of  the  Old  World  in  the  most  costly  and 
delicate  manufactures,  but  with  the  same  amount  of  pro- 
tection can,  and  does  to  a  considerable  extent,  exclude 
those  of  the  United  States — a  nation  less  advanced  in 
this  branch  of  industrial  production.  There  is  scarcely 
any  manufacture  of  this  country  which  has  not,  or  will 
not  be  transplanted  to  Canada,  and  stimulated^  under  the 
present  protective  duties  of  twenty  per  cent.  The  only 
exceptions  are  those  requiring  a  more  extensive  market 
than  the  comparatively  narrow  territory  and  scanty  popu- 
lation of  the  Province  can  afford.  Indeed,  it  has  been 
deliberately  calculated  by  some  Canadian  statesmen  that 
they  will  persevere  in  a  protective  system  against  the 
manufactures  of  the  United  States  until  the  time  arrives 
when  they  shall  not  only  be  capable  of  supplying  their 
own  market,  but  will  prefer  free  access  to  this  country 
for  the  sale  of  their  goods,  to  a  continuation  of  the  pro- 
tective duty  in  Canada.  The  result  of  a  free  interchange 
would  no  doubt  be  to  encourage  in  both  parts  of  the  con- 
tinent those  manufactures  for  which  each  is  especially 
adapted — thus  benefiting  the  people  of  the  two  countries 
by  supplying  their  necessities  with  less  expenditure  of 
useless  labor. 

It  is  just  to  add  that  the  tariff  of  duties  levied  by 
Canada,  during  the  period  in  question,  has  been  much 
lower  than  those  charged  by  us  upon  her  manufactures, 
and  that  while  our  exports  of  these  articles  amount  to 
many  millions,  it  is  very  doubtful  if  the  actual  manufac- 
tures of  Canada  bought  by  us  reached  in  the  aggregate  to 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   73 

more  than  a  few  hundred  thousand  dollars,  throughout  the 
whole  of  the  last  five  years,  during  which  the  diminution 
has  arisen,  although  in  that  time  the  Canadians  alone 
bought  from  us  manufactures  to  the  value  of  $15,343,004. 

The  whole  amount  of  our  import  from  Canada,  subject 
to  duty,  for  the  eight  years  which  have  elapsed  since  the 
treaty,  is  only  $3,595,350,  including  not  only  Canadian 
manufactures,  but  also  goods  from  all  other  parts  of  the 
world.  Of  these,  one  class  alone — iron  and  its  manufac- 
tures— amounted  in  value  to  about  $1,500,000 — not  pro- 
duced in  Canada — a  fact,  which  others  of  a  similar 
character  gives  good  ground  for  believing,  that  if  the 
articles  really  and  exclusively  made  in  the  Province  were 
selected,  it  would  be  seen  they  are  no  more  than  those 
minute  matters  which  are  scarcely  cognizable  in  legisla- 
tion or  national  statistics. 

Adding  $33,071,475,  the  value  of  foreign  merchandise, 
exported  by  us  to  Canada,  during  the  same  eight  years  to 
the  domestic  manufactures  also  thus  sold,  the  aggregate 
value  of  these  classes  of  our  exports  to  Canada  cannot  be 
less  than  $60,514,479,  against  $3,595,350— the  amount 
in  like  manner  bought  by  us  from  that  Province. 

In  addition  to  the  existing  and  increased  impediments 
to  the  importation  of  our  manufactures  into  Canada,  one 
of  the  obstacles  to  a  fair  reciprocity  consists  in  the  method 
enacted  by  Canadian  tariffs,  since  the  treaty,  of  levying 
duties  on  articles  according  to  their  value  at  the  place 
where  last  purchased,  not  according  to  their  value  in 
Canada,  or  by  specific  duties,  thus  practically  creating  a 
discrimination  against  the  merchants  and  carriers  of  the 
Tinted  States.  The  intention  was  explicitly  avowed,  and 
the  results  are  already  known  by  our  experience. 

Under  the  operation  of  natural  laws  the  trade  of 
Canada  in  many  important  articles  will  flow  to  and 
through  the  Atlantic  cities,  such  as  New  York  and  Bos- 
ton. Under  the  present  system  of  Canadian  legislation 
our  exports  of  foreign  goods  to  Canada  have  decreased 
from  s.V><>  1,125  in  1859  to  $1,560,397  in  1862,  and 
$1,468,113  in  1863.  They  attained  a  yet  higher  value 
previous  to  1859,  when  they  amounted  to  $8,769,580,  but 
for  purposes  of  fair  comparison  I  avoid  the  years  of  great 


74  OUR  COMMERCIAL   RELATIONS   WITH   CANADA. 

expenditure  and  undue  speculation.  In  1863  this  portion 
of  our  trade  was  only  one-half  of  the  average  it  reached 
in  each  of  the  five  years  preceding  the  treaty ;  was  less 
by  25  per  cent,  than  in  1849,  and  since  which  time  our 
total  exports  of  all  kinds  to  Canada  have  increased  five- 
fold, or  from  $4,234,724  to  $19,898,718. 

That  the  deficiency  in  our  exports  of  foreign  goods  to 
Canada  has  not  arisen  from  decreased  consumption,  but 
from  legislative  enactments  by  duties  practically  discrimi- 
nating against  the  Atlantic  cities,  is  made  yet  more 
evident,  by  the  official  records  of  the  Province,  whence  it 
appears  that  the  value  of  merchandise  imported  into 
Canada,  and  passed  through  the  United  States  under 
bond,  was,  in  1860,  $3,041,877  ;  in  1861,  $5,688,952  ;  and 
in  1862,  $5,508,427.  A  circumstance  which  has  justly 
created  much  dissatisfaction  in  the  provinces  is  that  the 
governor  of  Canada,  by  a  departmental  order,  might  dis- 
criminate in  favor  of  particular  routes  through  the 
United  States — a  singular  violation  of  the  comity  or 
hospitality  of  the  United  States  in  extending  unusual 
facilities  not  required  by  any  treaty  for  the  transfer  of 
goods  on  the  Grand  Trunk  railroad,  via  Portland  into 
Canada. 

The  chief  articles  of  commerce  between  the  two  coun- 
tries are  grain  and  flour.  Of  wheat  and  flour  we  have 
exported  to  Canada  between  the  years  1856  and  1863, 
inclusive  of  both  years,  a  quantity  amounting  in  value  to 
$30,643,772,  and  imported  to  the  value  of  $49,940,127; 
the  imports  exceeding  the  exports  by  $19,296,355.  Of 
wheat  alone  from  this  Province  our  imports  have  been 
20,956,322  bushels,  and  our  exports  to  it  22,933,763 
bushels.  Of  oats  and  other  grain  our  imports  have  been 
$15,230,364  in  value,  making  an  aggregate  of  $65,170,- 
491.  The  value  of  the  same  products  from  the  other 
Provinces  was  $1,990,787,  while  our  exports  were  $29,- 
422,918,  so  that  upon  the  whole  we  have  sold  the  people 
of  the  Provinces  more  of  cereals  and  their  products  by 
$360,474  than  we  have  bought  from  them,  our  exports 
having  been  $67,521,752,  and  our  imports,  $67,161,278. 
Of  flour  and  breadstuff s  alone,  from  1856  to  1861,  our 
exports  to  all  the  Provinces  exceeded  our  imports  from 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   75 

hein  by  $6,184,224.  From  the  nature  and  geographical 
)osition  of  our  territory  we  have  been,  and,  under  a  free 
ystem,  shall  continue  to  be  the  forwarders  and  merchants 
Between  the  people  of  the  different  Provinces. 

The  question  on  both  sides  as  regards  wheat  and  flour 
s  not  one  of  revenue  or  consumption,  but  rather  of  corn- 
nerce  and  transportation.  If  our  whole  crop  of  bread- 
stuffs  were  sold  to  Canada,  and  sent  as  it  would  be,  unless 
sold  to  the  United  States,  to  a  foreign  market,  via  the  St. 
Lawrence,  the  market  value  of  the  Canadian  crop  would 
neither  be  enhanced  nor  diminished ;  nor  would  our 
farmers  be  affected  if  the  Canadian  surplus  were  sent 
through  the  Erie  canal  or  over  our  railroads  and  the 
Hudson  river,  except  that  in  both  cases  the  local  demands 
would  be  increased  by  the  amount  required  for  the  use  of 
that  part  of  the  population  which  would  be  employed  in 
transacting  the  increased  business. 

Many  beneficial  results  are  produced  in  the  course  of 
these  exchanges.  A  large  amount  of  Canadian  wheat  is 
mixed  and  ground  with  western  wheat  by  our  millers, 
with  results  profitable  to  themselves  and  their  customers. 
New  England  consumes  much  of  the  best  wheat  and  flour 
of  Canada  West ;  and  I  am  not  one  of  those  who  are  desirous 
of  protecting  the  manufactures  of  New  England  by  taxing 
their  bread  as  well  as  their  fuel.  According  to  the  census 
of  1861  Canada  East  contains  1,111,566  inhabitants,  pro- 
ducing only  2,563,114,  and  consuming,  it  is  estimated, 
nearly  three  millions  of  bushels  of  wheat.  From  habit 
and  other  causes  these  people  prefer  the  spring  wheat  of 
Wisconsin  and  Illinois.  The  corn  produced  in  great 
abundance  and  at  small  cost  in  the  rich  warm  valleys  of 
the  Wabash  and  Illinois  is  consumed  to  a  considerable 
extent  in  the  Provinces,  especially  in  the  manufacture  of 
alcohol,  and  we  in  our  turn  import  and  use  a  large 
quantity  of  barley  and  oats — grains  grown  in  great  per- 
fection by  the  people  of  the  Provinces. 

The  products  of  the  forest  are  the  next  in  value  among 
our  importations  from  the  Provinces,  having  amounted 
during  the  last  eight  years  to  $23,537,203,  of  which  $19,- 
894,030  were  from  Canada,  and  $3,642,273  from  the  other 
rovinces — an  annual  average  of  $2,942,150,  while  our 


76   OUR   COMMERCIAL  RELATIONS   WITH   CANADA. 

sales  of  the  same  class  to  them  have  been  comparatively 
small.  No  inconsiderable  share  of  this  timber  has  re- 
placed old  rail-fences  on  our  farms,  or  enclosed  new  land, 
or  built  the  house  of  the  pioneer  on  the  prairies.  With 
the  progress  of  our  settlements  our  own  supply  of  this 
necessary  article  has  been  seriously  diminished,  and  its 
sources  have  gradually  become  more  remote  and  inacces- 
sible. Unlike  the  crops  of  the  farmer,  which  may  be 
produced  year  after  year,  a  second  crop  of  pine-timber  is 
never  expected  from  the  same  land.  Protection  may  seem 
to  have  some  force  in  favor  of  those  manufactures  which 
we  are  led  to  believe  will  ultimately  be  sold  cheaper  if 
we  grant  a  temporary  monopoly  to  their  producers,  but 
the  more  the  manufacture  of  lumber  is  increased  the  fur- 
ther we  shall  have  to  go  for  it,  and  the  higher  will  be  the 
price  of  an  article  of  which  there  is  necessarily  only  a 
limited  supply.  In  the  freedom  and  expansion  of  this 
trade  the  Government  relinquished  a  small  amount  of 
revenue,  but  the  traffic  of  our  northern  lakes  and  canals 
was  greatly  increased,  employing  profitably  a  large  num- 
ber of  our  citizens.  The  carrier  and  consumer,  together 
with  the  manufacturers  of  New  York  and  New  England, 
partake  of  these  benefits.  Timber,  a  necessary  article  of 
consumption  in  building,  and  especially  the  material  used 
for  this  purpose  by  people  of  moderate  means,  is  also 
essential  in  the  construction  of  ships — an  important 
branch  of  national  industry  and  element  of  greatness, 
compelled  to  face  the  eager  competition  of  the  whole 
world — and  the  supply  of  timber  suitable  for  ship-build- 
ing  has  been  so  much  reduced  in  the  United  States  that 
memorials  have  been  presented  to  this  House,  asking  that 
its  exportation  may  be  prohibited.  We  sell  timber  exten- 
sively to  the  British  Colonies  and  other  countries,  so  that 
the  exports  the  last  two  years  have  been  nearly  seven 
millions.  Our  importation  from  the  Provinces  of  the 
raw  materials,  used  to  a  considerable  extent  in  these 
manufactures,  is  annually  $2,942,150,  and  our  exports  of 
the  manufactures  themselves  in  the  last  two  years  have 
been  more  than  ten  millions. 

The  class  of  importations  next  in  value  is  that  of  ani- 
mals and  their  products.     These  during  the  last  eight 


OUR   COMMERCIAL  RELATIONS    WITH   CANADA.   77 

years  have  amounted  to  $11,813,332  from  Canada  alone. 
Vith  the  other  Provinces  this  trade  is  of  nominal  value. 
\V  export  large  quantities  of  pork,  beef,  lard,  butter, 
<ic.,  to  Canada,  making  in  all  an  aggregate  of  exports  in 
his  class  of  $12,057,510 — rather  more  than  our  imports 
—the  nature  of  the  trade  being  that  we  chiefly  import 
jiimals  themselves  and  sell  their  products. 

The  remaining  miscellaneous  articles  are  for  the  most 
>art  of  no  large  amount  separately,  but  consist  of  such 
naterials  as  should  be  supplied  to  our  people  and  manu- 
!acturers  at  as  low  a  price  as  possible.     Among  the  most 
mportant  of  those  not  yet  named  is  coal — an  essential 
Element  of  household  life  and  comfort,  and  the  chief  pro- 
lucer  of  the  great  labor-saving  power  of  steam.     The 
ixports  from  Ohio  and  Pennsylvania  to  Upper  Canada 
ire  nearly  of  the  same  value  as  our  importations  from 
:he  lower  Provinces.     In  Canada  West  the  coal  of  these 
States  has  superseded  that  brought  from  Liverpool  and 
the  lower  Provinces;  and,  at   Montreal,  the  anthracite 
Df  the  easterly  portions  of  Pennsylvania  also  competes 
with  the  coal  brought  from  Liverpool  and  Nova  Scotia. 
These  minerals  are  not  found  in  the  geological  formations 
of  Upper  Canada,  and  as  the  forests  disappear,  and  wood 
becomes  too  valuable  to  be  used  as  fuel,  that  part  of  the 
Provinces  will  ultimately  depend  exclusively  upon  the 
United   States  for  the  most  economical  supply  of  this 
necessary    article.      Anthracite    coal,    although    found 
abundantly  on  the  eastern  slope  of   the  Alleghanies,  is 
found  nowhere  in  the  Colonies,  and  will  always,  in  the 
natural  course  of  events,  be  imported  by  them,  while  for 
many  purposes  of  fuel,  in  the  eastern  States,  economy  dic- 
tates the  use  of  the  coal  of  Nova  Scotia.     Bituminous 
coal,  of  the  kind  most  commonly  used  in  the  manufacture 
of  gas,  is  not  found  in  our  territory  east  of  the  Alleghany 
mountain-,  within  an  available  distance  of  our  chief  At- 
lantic cities.     It  would  be  needless  to  say  that  a  trade  of 
this  kind  is  mutually  beneficial.     Under  a  system  of  free 
t  fade  in  coal  the  people  of   each  country  are  supplied 
more  cheaply  than  they  otherwise  could  be  with  neces- 
sary light  and  fuel;  and  both  save  throughout  large  re- 


78   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

gions  the  expense  and  labor  of  carrying  a  heavy  and 
bulky  article  for  several  hundreds  of  miles. 

Nearly  all  the  various  commodities  received  free  of 
duty  by  each  country  from  the  other  under  the  provi- 
sions of  the  Treaty,  are  the  simplest  and  plainest  necessa- 
ries for  the  support  of  human  life.  I  am  opposed  to  any 
permanent  legislation  that  would  prevent  the  free  impor- 
tation of  them,  to  every  system  that  under  any  specious 
name,  hiding  an  error  or  pretence,  signifies  dearer  food 
and  increased  taxation  on  the  raw  materials  used  in  the 
manufactures — to  any  system,  whether  called  protective 
or  not,  which  means  diminished  commerce  by  expelling 
colonial  produce  from  our  canals  and  railroads  to  increase 
the  employment  of  British  shipping  through  British  sea- 
ports at  the  expense  of  our  own. 

As  regards  the  objection  sometimes  urged,  that  if  by 
reciprocal  legislation  we  admit  certain  raw  materials  free 
of  duty  from  the  Provinces,  it  becomes  necessary  to  admit 
them  by  similar  reciprocal  legislation  from  several  other 
countries,  I  answer  that  like  enactments  would  in  all 
such  cases  prove  highly  advantageous  to  the  United 
States,  and  that  the  law  might  safely  and  beneficially  be 
extended  so  as  to  admit  also  on  the  same  terms  of  mutu- 
ally free  import  and  export  the  same  articles  from  every 
nation  in  the  world.  Our  supplies  might  be  little  in- 
creased by  such  arrangements,  but  our  markets  would  be 
immensely  extended. 

There  is  much  in  British  policy  which  should  serve  as 
a  warning  to  us — much  to  be  condemned — much  serving 
to  teach  us  what  we  should  always  shun  as  examples; 
but  we  cannot  imitate  a  better  or  more  honorable  prece- 
dent than  the  removal  of  taxes  from  human  food,  from 
the  daily  bread  and  nutriment  of  men,  women,  and  chil- 
dren, whether  rich  or  poor.  When  the  markets  of  Great 
Britain  were  in  effect  thrown  open  to  the  grain  and  pro- 
visions from  the  United  States  and  the  world,  the  old 
exclusive  policy  was  reversed  and  one  of  the  greatest  tri- 
umphs of  popular  liberty,  of  progress  towards  the  well- 
being  of  mankind  was  achieved.  It  is  common  to  quote 
with  admiration  the  sentiments  of  Greek  and  Roman  ora- 
tors, who,  sometimes  indeed,  conquered  the  narrow  limits 


OUR   COMMERCIAL   RELATIONS  WITH  CANADA.   79 

of  their  creed  and  ceased  to  treat  the  masses  with  con- 
tempt, but  I  hold  in  higher  esteem  and  deem  more  conso- 
nant with  justice,  humanity,  and  the  religion  by  which 
we  profess  to  regulate  our  actions — those  words  of  a 
modern  statesman,  Sir  Robert  Peel,  who  when  renouncing 
the  office  of  Prime  Minister  of  England  and  severing  all 
his  old  party  ties,  said  :  "  I  shall  leave  a  name  execrated, 
I  know,  by  every  monopolist,  who,  professing  honorable 
opinions,  would  maintain  protection  for  his  own  individ- 
ual benefit ;  but  it  may  be  I  shall  leave  a  name  sometimes 
remembered  with  expressions  of  good- will,  in  the  abodes 
of  those  whose  lot  it  is  to  earn  their  daily  bread  by  the 
sweat  of  their  brow;  when  they  shall  recruit  their  ex- 
hausted energies  with  abundant  and  untaxed  food,  the 
•  sweeter  because  no  longer  leavened  by  a  sense  of  injus- 
tice." These  words  it  seems  to  me,  contain  in  substance 
an  essential  portion  of  the  principles  by  which  we  should 

I  be  actuated  in  the  imposition  of  all  taxes — leaving  free 
as  water,  light  and  air  those  articles  which  are  absolutely 
necessary  for  the  sustenance  of  human  life.  Nor  can  I 
regard  this  principle  as  less  applicable  to  the  people  of 
the  United  States  than  to  those  of  the  British  Provinces ; 
and  it  may  reasonably  be  hoped  that  in  a  fair  conference 
between  parties,  each  of  whom  has  so  much  to  gain  by 
commerce  with  the  other,  and  so  much  to  lose  by  exclu- 
sive legislation,  existing  difficulties  may  be  removed  and 
the  interests  of  both  may  be  regarded  and  weighed  in  a 
just  balance. 

As  regards  the  navigation  of  the  St.  Lawrence,  I  am 
not  so  much  disposed  as  some  others  have  been  to  find 
fault  with  the  Treaty,  because  we  have  made  less  use  of 
this  river  than  was  expected.  They  would  have  had  an 
argument  more  in  accordance  with  their  usual  method  of 
reasoning,  if  the  Canadian  carriers  had  diverted  more  and 
more  traffic  from  our  own  railroads,  canals,  and  rivers,  from 
our  own  ports  on  the  lakes  or  the  sea-coast.  Looking 
forward  with  certainty  to  the  time  when  the  artificial 
barriers  separating  mankind  on  this  continent  shall  be 
overthrown,  and  a  system  of  free  commercial  intercourse 
exist  tlin»iiirh<>ut  tlir  whole  of  it,  we  should  guard  against 
the  useless  expenditure  of  human  labor  in  constructing 


80   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

canals  and  docks  or  erecting  cities  in  places  where  it  will 
not  be  remunerative.  As  the  cheapest  and  best  routes 
are  those  which  must  ultimately  prevail,  the  sooner  com- 
petition is  fairly  open  the  better  for  the  people — the 
greater  will  be  the  benefits  received  by  the  greatest  num- 
ber, without  any  injustice  to  any.  We  cannot  in  the  end 
prevent  this  consummation  if  we  would,  and  we  ought  to 
have  no  desire  to  prevent  it  if  we  could.  The  city  of 
New  York,  occupying  a  central  position  between  the  Al- 
leghany  mountains  on  the  Western  and  the  Blue  Moun- 
tains on  the  Eastern  side,  is  pre-eminently  the  emporium 
of  commerce  on  this  continent.  It  is  the  market  or  ex- 
change for  chartering  vessels.  So  true  is  this  that  ship- 
brokers  are  engaged  there  when  the  St.  Lawrence  is  open, 
in  chartering  vessels  to  go  thence  to  Quebec  for  the  pur- 
pose of  carrying  cargoes  to  European  ports,  thereby 
adding  the  cost  of  a  long  and  circuitous  route  to  their 
expenses,  instead  of  making  a  direct  voyage  across  the 
Atlantic  from  New  York.  Freights  are  usually  cheaper 
from  Canada  West  via.  New  York  than  the  St.  Law- 
rence, provided  there  are  no  governmental  restrictions  on 
either  route.  The  great  increase  in  our  trade  with  Can- 
ada, and  the  diminution  of  the  exports  and  imports  by 
that  river  immediately  after  the  Treaty,  proves  this  broad 
fact.  It  was  fully  admitted  by  the  Canadian  Minister  in 
the  establishment  of  discriminating  and  countervailing 
duties  which,  although  injurious,  were  not  sufficient  to 
control  fully  the  natural  laws  by  which  this  commerce  is 
regulated.  The  river  at  Quebec  and  Montreal  is  open 
only  for  about  half  the  year,  and  yet  docks,  warehouses, 
hired  attendants  and  other  necessary  appliances  of  trade 
must  be  maintained  for  the  whole  year.  The  navigation, 
when  open,  is  full  of  perils.  Narrow  straits,  heavy  fogs, 
strong  currents,  and  dangerous  ice,  sometimes  sunk  be- 
neath the  water  and  unseen,  beset  the  adventurous  mar- 
iner. Eight  steamships  belonging  to  the  line  subsidized 
by  the  Canadian  Government,  with  many  passengers,  have 
been  lost  since  1857,  while  the  old  Cunard  line,  estab- 
lished almost  with  the  beginning  of  steam  navigation  on 
the  ocean,  lost  only  one  vessel  and  no  passengers  in  the 
whole  period  of  its  existence.  That  solitary  loss  was  on 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   81 

the  coasts  of  the  Provinces  and  caused  by  the  dense  fogs 
and  unexpected  currents.  The  rates  of  freight  on  flour 
from  Quebec  to  Liverpool  are  usually  higher  than  they 
are  from  Buffalo  on  Lake  Erie  to  Liverpool  by  way  of 
New  York.  The  same  laws  of  trade  determine  the 
cheapest  route  as  to  more  bulky  articles.  The  rate  of 
freight  from  that  city  to  Europe  is  usually  only  one-half 
of  the  rate  from  Quebec.  New  York  being  the  great 
port  for  the  entry  or  arrival  of  merchandise  or  passen- 
gers, vessels  coming  to  it  receive  remunerative  rates  on 
inbound  cargoes,  while  going  from  Europe  to  Quebec 
they  usually  proceed  in  ballast,  and  hence  are  compelled 
to  charge  such  a  price  for  freight  to  the  Eastward  alone, 
as  will  yield  them  a  profit  both  on  the  inward  and  out- 
ward passage. 

Beyond  the  merely  statistical  views  presented  by  the 
subject,  the  relative  position  of  the  two  countries  forces 
itself  upon  our  attention.  They  form  together  by  far  the 
larger  portion  of  the  vast  North  American  continent — 
extending  from  one  great  ocean  to  the  other.  The  neigh- 
boring British  Possessions  reach  down  beyond  the  centre 
of  the  region  on  this  side  of  the  Rocky  Mountains,  and 
separate  the  wide  and  rich  domain  of  the  North-west 
from  those  of  the  East,  while  on  the  North-east  of  the 
Provinces  our  territory  projects  far  between  them  and  the 
great  Atlantic  highway  of  the  world — thus  pointing  out 
clearly  how  advantageous,  almost  how  necessary,  mutual 
rights  of  way  and  free  commercial  union  are  to  the  people 
of  each  country  through  the  territory  of  the  other,  unless 
we  mutually  condemn  ourselves  to  a  perpetual  system  of 
useless  and  wasted  labor  by  carrying  round  the  long  pro- 
jections made  by  the  territories  of  each.  We  have  in 
common  the  great  lakes.  A  s  their  country  rests  upon  the 
Arctic  seas,  ours  is  washed  by  the  warm  waters  of  the 
Gulf  of  Mexico.  Between  us  we  have  so  great  a  variety 
of  soil  and  climate  as  to  be  capable  of  yielding  almost 
every  production  necessary  or  conductive  to  the  comfort 
and  happiness  of  civilized  man.  There  is  no  reason  why 
the  commercial  relations  of  the  States  and  Provinces  can- 
not be  mutually  as  beneficial  as  those  of  the  different 
States  are  to  each  other.  The  wages  of  labor,  which,  it 
6 


82   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

is  held  by  some,  debar  us  from  unrestricted  commercial 
intercourse  with  other  countries,  lest  we  reduce  the 
remuneration  of  our  own  people  to  the  European  or 
Asiatic  standard,  are  on  ordinary  occasions  nearly  equal 
on  both  sides  of  the  frontier.  The  impediments  to  free 
communication  exist  only  through  laws  made  by  man, 
and  which  we  and  those  with  whom  we  have  to  negotiate 
can  make  or  unmake  as  we  choose.  Why  then  by  Gov- 
ermental  action  seek  to  force  the  capital,  labor,  and  traffic 
of  the  two  countries  into  barren  and  wasteful  channels, 
instead  of  mutually  protecting  home  industry  by  per- 
mitting it  to  attain  its  most  profitable  results  ?  Difficul- 
ties which  now  appear  to  be  insuperable  may  vanish 
before  united  effort  and  by  the  conference  of  intelligent 
commissioners  on  both  sides. 

Revenge  and  retaliation  are  sentiments  by  which  the 
mind  and  policy  of  a  true  statesman  can  never  be  gov- 
erned.    It  was  well  said  by  De  Tocqueville,  who  had  not 
before  him  the  illustration  of  his  subject,  furnished  to  us 
by  the  condition  of  our  own  country  at  this  day  :  "  The 
first  notion  which  presents  itself  to  a  party,  as  well  as  to 
an  individual,  when  it  has  acquired  a  consciousness  of  its 
own  strength,  is  that  of  violence ;  the  notion  of  persuasion 
arises  at  a  later  period,  and  is  derived  from  experience." 
,       Let  us,  at  least,  try  what  can  be  done  through  reason 
/  and  negotiation,  before  we  resort  to  a  rupture  of  the  ex- 
V  isting  ties,  and  undo  the  work  already  accomplished  in 
\the  right  direction,  after  much  effort. 

I  trust  there  are  few  who  deem  it  the  part  of  wisdom 
or  sound  policy,  or  consistent  with  due  regard  to  the 
character  of  the  nation  represented  by  us  here  to  attach 
any  weight  to  whatever  ebullitions  of  temporary  ill-will 
may  have  arisen  from  individuals  in  the  Provinces  or 
Great  Britain.  These  manifestations,  having  their  sources 
in  ignorance  or  unworthy  motives,  may  safely  be  left 
to  the  class  of  minds  in  which  they  originated.  Let  us 
avoid  degrading  this  House  to  that  ignoble  level,  but  in 
conformity  with  our  own  dignity  and  honor  aspire  to  be 
the  leaders  in  such  a  wise  and  enlightened  policy,  as,  in- 
stead of  irritating  the  people  of  the  Colonies  and  induc- 
ing them  to  mistake  a  pitiful  hatred  to  this  country  for 


OUR  COMMERCIAL   RELATIONS   WITH   CANADA.   83 

patriotism  towards  their  own,  shall  aid  and  assist  liberal 
statesmen  on  either  side  of  our  Northern  boundary  or  of 
the  Atlantic  ocean  in  their  efforts  to  develop  those 
mutual  interests  constituting  a  great  international  law, 
and  which  are  the  more  clearly  seen  to  be  harmonious  and 
identical,  the  more  closely  they  are  examined. 

By  adopting  the  principle  of  commercial  retaliation  or 
exclusion  we  can  injure  the  people  of  the  Provinces,  but 
in  hostilities  of  this  kind,  as  well  as  in  actual  warfare, 
although  one  party  often  suffers  more  than  the  other,  yet 
both  are  injured.  It  may  be  that,  even  although  we 
adopt  an  isolating  policy,  the  people  of  the  Provinces 

•  will  be  too  wise  to  exclude  our  products  from  their  mark- 
ets on  the  present  terms  of  equality  and  freedom.  Can- 
ada at  least  admitted  them  without  duty  before  the  treaty 
—a  liberal  policy,  dictated  on  her  part  by  the  soundest 
financial  considerations,  for  while  her  people  were  bene- 
fited by  cheaper  prices  on  some  commodities,  it  drew 
trade  to  her  canals,  seaports,  and  shipping.  Even  this 
has  been  turned  into  an  argument  against  our  practising 
the  same  system  towards  her.  It  was  rather  an  example 
of  a  just  and  comprehensive  idea  of  self-interest  for  our 
imitation,  by  no  longer  refusing  our  forwarders  permis- 
sion to  carry  her  products  to  the  ocean  on  our  canals  and 
railroads,  for  remunerative  and  satisfactory  prices.  The 
course  pursued  by  Canada  before  the  treaty  is  probably 
a  fair  indication  of  the  course  she  would  adopt  if  it  were 
unconditionally  annulled,  and  we  should  show  ourselves 
determined  to  maintain  an  exclusive  position. 

Until  1847  the  produce  of  the  colonies  was  admitted 
under  special  privileges  into  the  markets  of  Great  Bri- 
tain, but  when  these  were  removed  the  authority  of  that 
country  over  the  financial  affairs  of  the  colonies  was  also 
relaxed.  At  that  time  the  Canadian  duties  on  American 
manufactures  were  seven  and  a  half  per  cent,  more  than 
on  similar  articles  made  in  Great  Britain,  but  one  of  the 
first  uses  made  by  the  colonies  of  their  increased  power 
was  to  equalize  taxation  on  the  manufactures  of  both 
countries  by  an  uniform  tariff  of  seven  and  a  half  per 
cent,  on  all. 

As  colonies  of  Great  Britain  the  Provinces  may  easily 


84   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

return  to  preferential  duties  iii  favor  of  the  nation  with 
which  they  are  politically  connected.  If  they  did  not 
establish  between  themselves  and  the  mother  country  a 
system  of  imports,  exports,  and  transit,  entirely  free,  like 
that  prevailing  between  the  different  States  of  this  Union, 
they  might  have  recourse  to  direct  taxation,  and  adopt  so 
low  a  rate  of  duties  on  the  products  of  all  the  nations  of 
the  world,  that  it  would  be  almost  impossible  to  enforce 
the  tariff  of  the  United  States  along  the  vast  frontier  of 
the  North.  Already  the  project  of  unlimited  free  trade 
finds  its  advocates  in  Canada,  and  leading  organs  of  pub- 
lic opinion,  while  admitting  the  benefits  of  reciprocity  to 
them,  and  affirming  their  readiness  to  do  all  that  consist- 
ently with  their  own  honor  can  be  done  by  them  to  main- 
tain the  most  friendly  commercial  relations  with  us,  sig- 
nificantly intimate  that  a  different  course,  perhaps  in  the 
end  not  less  beneficial,  is  open  to  them. 

There  is  little  room  for  doubt  that  if  we  rashly  and 
persistently  pursue  a  hostile  and  exclusive  course,  most 
of  this  trade  now  in  our  possession  will  be  divided  be- 
tween the  colonies  themselves  and  Great  Britain.  The 
Provinces  will  be  compelled  to  execute  their  old  project 
of  an  inter-colonial  railroad  from  Halifax  and  St.  John, 
and  perhaps  other  ports,  to  the  interior  of  their  country, 
thus  completing  the  only  remaining  link  in  their  present 
vast  system  of  internal  communication,  and  giving  them 
uninterrupted  access  from  Lake  St.  Clair  and  Lake  Huron 
to  the  ocean,  through  their  own  territory,  at  all  periods 
of  the  year.  Their  people,  by  commercially  uniting  the 
Provinces  together,  may  soon  accomplish  the  development 
of  a  system  of  home  industry  which  will  make  them  in- 
dependent of  our  manufactures,  and  competitors  with  us 
in  every  neutral  market.  They  may  become  their  own 
shippers  and  traders  for  all  commodities  of  foreign  origin. 
Although  we  may  banish  them  and  their  produce  and 
merchandise  from  our  routes  of  communication  with  the 
Atlantic,  it  is  not  likely  we  shall  divert  the  traffic  in 
American  produce  via  the  St.  Lawrence  by  any  legisla- 
tion we  can  adopt.  We  cannot  legislate  for  the  Canadi- 
ans. We  can  cut  them  off  from  the  use  of  our  railroads 
and  canals,  but  may  fail  in  persuading  them  to  adopt  le- 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.    85 

gislation  of  the  same  suicidal  character.  It  is  to  be  ex- 
pected that  they  will  keep  their  channels  for  freight  open 
to  our  produce.  We  cannot  compel  them  to  grant  us  a 
monopoly  of  this  kind ;  but  if  we  should  exclude  them 
from  our  thoroughfares,  their  carrying  system  will  reap 
the  benefit  of  doing  business  for  both  countries — we 
transacting  a  part  of  it  for  one  only — and  we  shall  pre- 
sent to  the  world  the  instructive  but  undignified  spectacle 
of  men  who,  instead  of  cherishing  this^  branch  of  our 
industry  and  directing  it  to  the  full  fruition  of  its  natural 
advantages,  sever  it  from  the  trunk,  even  while  it  is  sup- 
porting us. 

Let  those  whose  duty  it  is  to  watch  over  and  promote 
the  permanent  and  substantial  interests  of  the  country  be 
led  away  by  no  narrow  view,  no  temporary  and  transient 
feeling,  but  consider  and  reflect  upon  the  calm  and  sober 
judgment  formed  in  times  of  less  excitement,  by  them- 
selves, the  statesmen  who  have  gone  before  them,  and  the 
nation  at  large.  u  There  has  not,"  said  Henry  Clay,  often 
called  the  author  of  the  American  system, "  been  a  moment 
since  the  adoption  of  the  present  Constitution,  when  the 
United  States  have  not  been  willing  to  apply  to  the  trade 
between  them  and  the  British  colonies  principles  of  fair 
reciprocity  and  equal  competition."  As  it  was  with  him 
so  also  was  it  with  Adams,  Webster,  Van  Buren,  Marcy, 
Douglas,  and  all  those  of  every  party  who  have  left 
among  us  an  enduring  fame  as  statesmen. 

The  appointment  of  Commissioners  on  both  sides  to 
consult  carefully  as  to  the  course  most  conducive  to  our 
mutual  benefit  appears  to  be  less  liable  to  objection  and 
to  combine  more  advantages  than  any  other  plan.  On 
our  side  there  are  varied  interests  to  be  consulted — those 
of  the  Eastern,  Central  and  Western  States,  whether 
they  more  especially  consist  in  the  promotion  of  manu- 
factures, agriculture,  or  commerce — or  in  the  united  and 
harmonious  progress  of  all  these  pursuits.  On  the  side 
of  the  Colonies  are  separate  legislatures  or  governments 
of  several  provinces,  where  different  views  will  be  taken 
on  many  points  of  detail — perhaps  of  economical  prin- 
ciples. The  whole  will  require  so  much  consideration 
that  I  should  despair  of  complete  success  unless  it  should 


86   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

receive  full  and  undivided  attention.  It  will  be  the  duty 
of  such  commissioners  to  ascertain  how  far  we  may  re- 
move the  obstacles  which  since  the  date  of  the  Treaty 
have  through  the  legislation  of  Canada  impeded  the  trade 
of  our  great  commercial  cities,  impaired  our  manufactur- 
ing interests,  and  tended  to  diminish  the  amount  of  in- 
land navigation  and  transit  trade  which  would  otherwise 
have  accrued  to  the  States  bordering  on  the  British 
Provinces. 

We  are  too  apt  to  think  the  interests  of  the  nation  can 
only  be  advanced  at  the  expense  of  injury  to  another.  In 
reality  and  under  a  true  system  of  reciprocity  each  of  us 
would  receive  the  benefits  of  natural  advantages  enjoyed 
by  the  other,  which  in  its  turn  is  benefited,  not  by  with- 
holding participation,  but  by  inviting  it.  This  principle 
is  as  true  and  should  be  as  universally  admitted  as  those 
of  mechanical  improvements  or  labor-saving  machinery. 
Hence,  the  words  of  the  resolutions  passed  by  the  Legis- 
lature of  the  State  of  New  York  express  clearly  and 
definitely  the  principle  by  which  we  should  be  guided, 
saying  "that  free  commercial  intercourse  between  the 
United  States  and  the  British  North  American  Provinces 
and  Possessions,  developing  the  natural,  geographical, 
and  other  advantages  of  each,  for  the  good  of  all,  is  con- 
ducive to  the  present  interest  of  each,  and  is  the  only 
proper  basis  of  our  intercourse  for  all  time  to  come."  It 
has  been  well  illustrated  by  a  French  writer  in  the  fable 
of  the  blind  man  and  the  lame,  who  between  them  pos- 
sessed all  that  was  necessary  for  both.  One  guided  the 
other,  who  in  his  turn  was  carried,  and  each  receiving 
important  benefits  disdained  too  close  inquiry  as  to  which 
of  the  two  rendered  the  most  valuable  service. 

We  are  considering  the  commercial  relations  of  one- 
eighth  of  the  habitable  surface  of  the  world.  Of  this 
vast  region,  the  United  States  and  the  people  of  the 
Colonies,  subject  to  a  beneficent  Providence,  control  the 
present  condition  and  shape  the  future  history.  It  has 
been  given  to  us,  in  the  maturity  of  human  civilization, 
as  a  new  parchment  on  which  we  may  inscribe  whatever 
characters  we  choose;  and  the  opportunity  will  never 
return  again  in  all  the  plentitude  of  the  present  time. 


OUR  COMMERCIAL   RELATIONS   WITH   CANADA.   87 

With  nations,  as  with  individuals,  those  habits  and  ten- 
dencies are  easily  formed  in  youth,  which  are  afterwards 
developed  and  control  the  career  through  long  years  or 
centuries  of  the  future.  We  may  differ  from  the  people 
of  the  Provinces,  in  opinion  as  to  the  best  form  of  gov- 
ernment, but  other  nations  can  judge  better  for  themselves 
than  we  can  for  them  as  to  their  own  method  of  legisla- 
tion. A  prohibitory  or  exclusive  system  would  be  no 
less  unnatural  and  injurious  as  to  every  commercial,  po- 
litical, and  moral  result  than  if  we  separated  New  York 
from  Massachusetts,  and  both  of  these  from  Ohio,  Illinois, 
or  Iowa.  Let  us  then  regulate  our  intercourse,  not  by 
mutual  fear  or  destruction,  but  by  creating  or  rather  by 
developing  reciprocal  benefits  in  accordance  with  the 
manifest  designs  of  Him  who  made  the  world,  and  who 
should  never  be  mentioned  except  upon  occasions  worthy 
of  Him.  Such  a  system  is  doubly  beneficial : 


Urn 


"  It  droppeth  as  the  gentle  dew  from  Heaven 
Upon  the  place  beneath ;  it  is  twice  blessed — 
It  blesseth  him  that  gives  and  him  that  takes." 


nder  its  influence,  assisted  by  a  wise  application  of  the 
reason  with  which  man  is  endowed,  old  animosities  will 
be  forgotten,  and  in  days  to  come  the  people  of  both 
countries  seeing  plainly  that  the  social  body  of  mankind 
—like  the  material  body  of  the  individual — is  provided 
by  nature  with  a  healing  power,  will  find  additional 
reasons  to  reverence  Him  by  whom  the  universe  itself 
was  framed. 


OUR  COMMERCIAL  RELATIONS 

WITH 

THE   BRITISH   NORTH   AMERICAN   PROVINCES. 


HOUSE  OF  REPRESENTATIVES,  May  26,  1864. 


The  House  having  proceeded  in  the  regular  order  of  business 
to  the  consideration  of  a  joint  resolution,  authorizing  the  Presi- 
dent to  give  the  requisite  notice  for  terminating  the  treaty  made 
with  Great  Britain  on  behalf  of  the  British  Provinces  in  North 
America,  and  to  appoint  commissioners  to  negotiate  a  new  treaty, 
with  the  British  Government,  based  upon  the  true  principles  of 
reciprocity,  and  several  members  having  discussed  the  subject, 
Mr.  Ward  summed  up  the  debate. 

MR.  SPEAKER  :  In  the  consideration  which  I  have  given 
to  this  question  I  have  regarded  it  from  no  sectional  or 
partisan  point  of  view,  but  have  studied  it  in  its  inter- 
national aspects,  and  thus  I  shall  continue  to  present  it. 

I  know  there  are  objectionable  features  in  the  working 
of  the  treaty,  but  with  very  few  exceptions  the  points 
raised  in  opposition  to  it  were  presented  in  the  report  of 
the  Committee  on  Commerce,  and  also  in  my  remarks 
when  opening  this  discussion.  I  named  impartially  the 
merits  and  the  defects,  the  advantages  and  evils  existing 
in  the  present  arrangements.  Nothing  was  suppressed, 
nothing  was  exaggerated,  and  I  endeavored  to  judge  the 
subject  with  the  utmost  possible  justice  and  impartiality. 
I  confide  in  the  honor  and  character  of  this  House  to 
treat  this  great  international  question  as  to  our  northern 
neighbors  in  the  same  candid  and  honest  spirit  of  good- 
will and  truth  with  which  we  rightfully  wish  them  to  re- 
gard us  and  our  affairs.  I  trust  this  House  will  rise 
above  mere  local  considerations.  It  must  rise  above 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   89 

prejudice.  I  have  no  fear  of  Great  Britain.  I  have  con- 
sidered this  question  as  one  affecting  many  of  the  most 
important  interests  of  this  nation.  Thus  I  trust  this 
House  also  will  consider  it,  uninfluenced  by  any  fear  or 
intimidation  of  Great  Britain.  I  cannot  regard  with  com- 
placency the  frequent  assertions  made  by  several  honorable 
members  as  to  our  national  reputation.  There  is  no 
need  to  vindicate  it.  It  should  be,  like  the  character  of 
Caesar's  wife,  above  suspicion,  and  I  am  impatient  when  I 
hear  it  unnecessarily  asserted  or  called  into  question. 

I  propose  to  review  as  briefly  as  I  can  the  chief  re- 
marks made  during  this  debate  in  opposition  to  the  treaty, 
or  rather  to  any  equitable  and  mutually  beneficial  and 
satisfactory  arrangement  of  our  commercial  relations 
with  the  provinces. 

The  gentleman  from  Ohio  [Mr.  SPALDING]  referred  to 
the  treaty  of  1817 — a  treaty  entirely  irrelevant  to  the 
present  subject.  We  have  the  power  on  a  notice  of  six 
months  to  terminate  that  treaty;  but  there  is  no  necessary 
connection  between  the  two.  If  the  resolution  of  the 
Committee  on  Commerce  be  adopted,  questions  regarding 
the  armaments  of  both  nations  on  the  lakes  may,  I  think, 
without  impropriety  be  discussed,  and  very  probably  would 
be  discussed  by  the  proper  authorities  on  both  sides. 

It  has  been  attempted  to  influence  the  action  of  this 
House  by  the  introduction  of  letters  from  different  in- 
dividuals. I  have  not  endeavored  to  acquire  any  support 
for  my  views  from  this  source,  although  I  have  received 
many  letters  from  various  gentlemen  of  eminent  ability 
and  character.  I  may,  however,  be  permitted  to  give 
portions  of  letters  from  Hon.  Edward  Everett,  who  was 
Secretary  of  State  during  a  considerable  part  of  the  ne- 
gotiations leading  to  the  treaty.  When  acknowledging 
the  receipt  of  a  copy  of  the  report  of  the  Committee  on 
Commerce  in  1862,  he  said: 

"It  seems  quite  evident  that  the  Provincial  Govern  merit  has 
violated  the  spirit  of  the  treaty  in  various  ways.  I  trust,  however, 
that  tlu* re  will  be  no  countenance  given  to  the  threat  of  abrogat- 
ing it,  a  measure  never  adm^sil.le  but  in  a  case  of  the  greatest 
provocation  from  the  other  party.  Having  the  interests  of  Canada 
West  enlisted  in  favor  of  a  just  policy  under  the  treaty,  and  I 


90   OUR  COMMERCIAL  RELATIONS   WITH   CANADA. 

presume  also  the  sympathies  of  the  Imperial  Government  in  the 
same  direction,  there  will  be  no  difficulty,  I  imagine,  in  persuad- 
ing the  provincial  Parliament  that  there  is  nothing  to  be  gained 
by  a  war  of  tariffs." 

In  a  subsequent  letter  he  said  : 

"  In  saying  that  1  hoped  the  abrogation  of  the  treaty  would 
not  be  thought  of,  I  meant  its  abrogation  before  the  time  ap- 
pointed by  the  instrument  itself.  When  that  time  arrives,  if  it 
shall  appear  that  the  colonial  legislation  is  in  contravention  of 
the  spirit  and  policy  of  the  convention,  security  must  be  taken 
for  a  change  in  that  legislation,  or  the  convention  be  given  up, 
which  I  trust  will  not  be  the  case. 

"  I  have  reason  to  think  we  shall  have  the  Imperial  Govern- 
ment with  us  in  a  fair  and  honest  execution  of  the  convention." 

I  will,  in  passing,  make  one  remark  in  regard  to  the 
Constitution,  so  far  as  this  question  is  concerned.  -The 
gentlemen  from  Vermont  (Mr.  MOKRILL)  occupied  a  col- 
umn and  a  half  of  his  speech  in  attempting  to  show  that 
no  treaty  can  deprive  us  of  our  right  to  legislate  in  re- 
gard to  revenue  measures.  All  I  have  to  say  is,  that  this 
treaty  did  not  deprive  this  honorable  body  of  any  portion 
of  our  rights  in  this  respect.  The  treaty  was  inoperative 
until  an  act  was  passed  by  this  House  on  the  5th  day  of 
August,  1854,  for  the  purpose  of  carrying  it  into  effect. 
The  House  may  by  its  own  sanction  and  by  a  solemn  act 
give  effect  to  such  a  treaty. 

I  shall,  without  any  further  general  remarks,  confine 
myself  mainly  to  the  consideration  of  the  chief  points 
which  have  been  most  frequently  urged  in  favor  of  ab- 
ruptly terminating  our  commercial  arrangements  with 
the  Provinces. 

The  main  assertions  on  which  the  member  from  Maine 
(Mr.  PIKE)  relied  as  regards  the  statistics  or  business  as- 
pects of  the  case  are,  that  our  trade  to  the  Provinces  has 
created  a  balance  against  us.  In  one  form  or  another  this 
assertion  has  frequently  been  made.  The  question  he 
has  raised  is  one  of  easy  solution,  and  needs  nothing  more 
than  a  brief  examination  of  the  statement  of  the  Secre- 
tary of  the  Treasury,  compiled  from  the  duly  authenti- 
cated official  records.  The  treaty  went  partially  into 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   91 

operatiou  in  1854,  extensive  transactions  having  that  year 
been  made,  based  upon  the  expectation  that  drawbacks 
would  be,  as  I  am  told  they  ultimately  were,  allowed. 
That  was  the  year  of  the  treaty— neither  before  nor  after. 
Its  transactions  were  mixed.  Therefore  its  trade  should 
be  excluded  from  the  statistics  of  commerce  in  the  peri- 
ods before  and  after  the  treaty.  No  full  and  fair  infer- 
ence can  be  drawn  from  that  year,  as  it  belongs  to  neither 
epoch.  In  1853,  the  year  before  the  treaty,  our  imports 
from  the  Provinces  were  $7,550,718  and  our  exports  were 
$13,140,642,  leaving  a  balance  in  our  favor  of  less  than 
$6,000,000;  and  the  change  was  so  great  that  in  1855, 
the  year  after  the  treaty  took  effect,  our  exports  increased 
to  $27,806,020,  being  more  than  double  those  of  1853. 
As  these  imports  in  1855  were  $15,136,734,  the  balance 
in  our  favor  the  year  after  the  treaty  was  more  than 
$12,QPO,000,  a  larger  amount  than  we  either  sold  to  or 
bought  from  them,  with  one  exception,  in  any  year  before 
the  treaty.  Yet  it  is  at  least  implied  by  the  member  from 
Elaine  that  when  we  made  the  treaty  there  was  annually 
a  balance  in  our  favor,  paid  to  us  in  gold,  of  about  six- 
teen million  dollars ;  a  sum  larger  by  about  three  millions 
than  the  amount  we  ever  sold  to  them  in  any  year  what- 
ever before  the  year  when  the  treaty  was  made. 

I  deeply  deplore  the  misrepresentations  which  are  cur- 
rent on  this  subject.  Do  they  proceed  from  a  conscious 
and  wilful  desire  to  mislead  us  on  a  subject  of  so  great 
importance?  I  hope  not.  I  am  not  willing  to  think 
they  do.  Few  national  injuries  are  more  pernicious  than 
the  perversion  of  facts  in  the  national  councils,  thus  mis- 
leading and  betraying  the  people  by  poisoning  one  of  the 
fountains  whence  they  derive  their  information.  There 
may  be  some — I  trust  they  are  not  many — in  this  House 
who  do  not  see  that  however  popular  this  kind  of  betrayal 
may  be  for  a  time,  it  not  only  inflicts  an  injury  upon  our 
pecuniary  interests  and  our  honor,  but,  creating  and  cher- 
ishing a  habitual  sense  of  national  injury  and  wrong, 
leads  us  in  the  end  to  such  results  as  we  are  now  experi- 
encing in  the  deadly  struggle  between  the  different  sec- 
tions of  this  Union.  I  attribute  no  unworthy  motives  to 
any  one,  but  whoever  will  examine  the  official  records  of 


92  OUR   COMMERCIAL  RELATIONS  WITH   CANADA. 

our  own  Government  will  find  that  my  statements  are 
accurate. 

It  was  said  by  the  honorable  member — he  repeated  the 
remark  several  times — that  the  balance  of  our  trade  with 
the  Provinces  is  against  us.  The  statement  appears 
slightly  modified  in  his 'remarks  as  printed  in  the  Globe, 
but  is  substantially  retained  there.  Did  he  mean  during 
the  last  year  of  which  we  have  official  information  ?  It 
was  then  nearly  two  millions  in  our  favor.  Did  he  mean 
during  the  whole  time  since  the  treaty  went  into  operation  ? 
In  that  time  it  was  more  than  twenty-six  millions  in  our 
favor.  There  is  nothing  vague  about  this.  There  is  no 

O  O 

mystery  in  the  figures.  There  is  no  need  of  passion  or 
declamation.  The  solution  is  as  easy  as  that  of  any 
school-boy  sum  in  arithmetic  or  of  any  ordinary  settle- 
ment of  accounts  between  individuals.  I  find  my  data  on 
the  sixth  page  of  the  letter  from  the  Secretary  of  the 
Treasury  in  answer  to  the  resolution  of  this  House  on  the 
17th  day  of  last  December,  asking  for  information  as  to 
the  operations  of  this  treaty.  We  asked  him  for  infor- 
mation, and  it  is  furnished  to  us.  Shall  we  ignore  it,  and- 
substitute  for  it  such  conclusions  as  our  several  fancies 
may  suggest?  We  may  in  this  way  point  a  paragraph 
or  lend  some  illusory  brilliancy  to  a  speech;  but  that  is 
not  statesmanship.  It  does  not  accord  with  our  duty  to 
the  nation.  The  balance  of  gold  on  which  so  much  stress 
has  been  laid  was  not  paid  by  us  to  the  Provinces,  but  by 
them  to  us.  It  amounted  to  $26,445,692.  This  is  the 
state  of  affairs  as  to  which  the  honorable  member  says  he 
"  would  if  necessary  use  force  to  put  an  end  to  an  alliance 
so  injurious." 

The  subject  has  been  treated  as  if  there  were  no  dif- 
ference between  paying  money  for  foreign  gewgaws  or 
costly  luxuries,  and  for  such  articles  as  are  daily  and 
hourly  necessary  to  the  support  of  our  Army  and  Navy, 
and  for  that  yet  larger  army — the  industrial  army — the 
laboring  population,  on  whom  the  existence  of  the  Army 
and  Navy  and  of  all  classes  of  society  must  depend. 
With  exceptions  too  trivial  to  be  worthy  of  notice,  all 
our  importations  free  under  the  treaty  are  the  plainest 
necessaries  of  life.  It  is  an  outrage  upon  the  best  and 


OUR   COMMERCIAL   RELATIONS    WITH   CANADA.   03 

wisest  principles  of  modern  political  science  to  tax  them. 
Thrv  are  an  essential  part  of  all  that  enables  us  to  pay 
taxv<,  and  support  either  Army  or  Navy — of  all  that 
makes  us  strong  or  prosperous  either  in  war  or  peace. 

There  is  another  consideration  to  be  regarded  in  con- 
nection with  this  balance  of  trade  in  relation  to  these 
colonies — a  reason  why  this  trade  is  not  identical  in  prin- 
ciple with  many  other  transactions,  but  is  an  exceptional 
case.  I  will  illustrate  the  point  by  a  familiar  and  prac- 
tical example.  It  is  readily  understood  that  if  a  mer- 
chant or  dealer  goes  over  to  Canada,  and  there  buys 
certain  articles — say,  for  instance,  a  thousand  barrels  of 
flour  or  five  thousand  bushels  of  wheat — he  does  an  act 
which,  so  far  as  it  goes,  creates  a  balance  against  the 
United  States,  to  be  paid  in  gold  or  its  equivalent.  But 
if  he  sends  the  flour  or  wheat  over  American  railroads  or 
canals  to  Boston  or  New  York,  and  thence  has  it  re- 
shipped  to  England,  France,  Cuba,  or  elsewhere,  he,  by 
his  series  of  actions,  gives  freight  and  profit  to  our  inland 
carriers  and  Atlantic  shippers,  employs  a  large  number 
of  our  people  in  various  occupations,  and  brings  home  at 
last  the  original  outlay,  increased  by  the  additional  sum 
invested  for  freight,  storage,  commissions,  and  labor  of 
various  kinds,  together  with  additional  profit  for  himself, 
all  in  the  same  precious  metal  or  its  equivalent.  Gentle- 
men who  reason  as  the  honorable  member  has  argued, 
forget  that  this  nation  has  commercial  dealings  ;  and  that 
in  such  a  case  as  I  have  described,  it  is  quite  as  just  to 
complain  of  the  balance  of  trade  being  against  us  as  it 
would  be  for  a  merchant  who  has  extensive  transactions 
in  all  parts  of  the  world  to  complain  of  the  farmer  or 
manufacturer  from  whom  he  buys  more  than  he  sells  to 
him.  lie  buys  from  one  man  for  the  purpose  of  selling 
to  another. 

While  the  honorable  member  takes  a  narrow  and  lim- 
ited view  of  our  commercial  relations  with  the  Provinces, 
he  has  gone  a  long  way  back  in  his  statements  as  to  the 
colonial  policy  of  Great  Britain.  He  quoted  certain 
laws  enacted  by  tlje  Government  of  that  country  a  hun- 
dred and  iifty  years  ago,  ordaining  that  none  of  the 
colonial  trade  should  be  carried  in  any  but  British  vessels. 


94   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

• 

Since  tlie  time  to  which  he  referred  five  generations  of 
men,  with  their  inventions,  their  experience,  and  their 
changes,  have  lived  and  died.  The  folly  of  those  laws 
was  long  ago  demonstrated.  They  were  tried,  found 
wanting,  and  have  been  repealed.  Even  the  colonial 
tariffs  discriminated  in  favor  of  British  and  colonial 
produce  and  manufactures  until  1843,  when  these  dis- 
criminations were  abolished.  The  colonies  now  make 
their  own  tariffs  and  tax  British  manufactures  at  high 
rates,  to  encourage  production  in  their  own  territory. 
For  several  years — for  all  the  years,  so  far  as  I  know- 
since  the  treaty  the  trade  of  Canada  with  the  United 
States  was  greater  not  only  than  with  Great  Britain,  but 
than  with  all  other  countries  but  our  own  added  together. 

I  wish  to  accept  facts  as  I  find  them.  Should  I  do 
otherwise  I  should  be  unworthy  of  a  place  in  this  House, 
and  false  in  my  duty  to  my  country.  Coming  down  as 
closely  as  I  can  to  the  present  time  and  to  the  special 
point  named  by  the  honorable  member,  I  find  on  refer- 
ence to  our  own  reports  on  commerce  and  navigation,  that 
during  the  last  five  years  the  entries  and  clearances  of 
tonnage  employed  in  carrying  on  the  trade  between  the 
United  States  and  the  British  North  American  Prov- 
inces have  been  about  fifty  per  cent,  in  favor  of  this  coun- 
try. They  were  20,763,512  of  United  States  tonnage, 
and  13,844,919  of  foreign  tonnage, 

A  very  large  increase  in  our  exports  to  the  Provinces, 
both  of  our  own  manufactures  and  agricultural  produce 
and  of  goods  of  foreign  origin,  did  result  from  the  treaty, 
as  was  reasonably  expected.  Our  domestic  exports  in- 
creased from  $7,404,087  in  1853,  to  $15,806,642  in  1855, 
and  $22,714,697  in  1856,  having  doubled  and  trebled  in 
periods  of  one  and  two  years  respectively.  Our  exports 
of  goods  of  foreign  origin  were  $5,736,555  in  1853,  being 
larger  in  that  year  than  they  had  ever  been  before.  In 
1855,  the  year  next  after  the  treaty,  they  were  $11,999,- 
378,  having  doubled  in  full  accordance  with  the  natural 
tendency  of  the  treaty.  My  statements  rest  on  the  official 
authority  of  our  own  Government.  They  cannot  be  refu- 
ted. No  attempt  has  been  made  to  meet  them.  No  no- 
tice was  taken  of  them  by  the  honorable  member,  or  by 


OUR  COMMERCIAL   RELATIONS   WITH   CANADA.   95 

any  gentleman  who  has  spoken  in  opposition  to  the  reso- 
lutions of  the  Committee  on  Commerce. 

A  few  more  words  as  to  this  balance  of  trade.  Before 
the  treaty  Canada  admitted  the  cereals  and  many  other 
products  free  of  duty.  Consequently  we  sold  to  her,  al- 
though we  refused  to  buy  from  her.  The  result  was  that 
a  large  amount  of  these  articles  went  abroad  through  the 
St.  Lawrence,  to  the  injury  of  our  merchants,  canals,  rail- 
roads, seaports,  ocean  shipping,  and  of  all  classes  of  our 
population.  The  year  after  the  treaty,  the  trade  by  the 
St.  Lawrence  decreased  to  the  amount  of  $15,203,600,  and 
so  soon  as  the  routes  and  markets  of  the  United  States 
were  opened  the  whole  was  transferred  to  our  carriers, 
for  in  the  same  time  the  trade  to  the  United  States  in- 
creased $15,856,624,  or  from  $24,971,096  to  $40,827,720. 
In  this  way  a  change  was  made  in  the  "  balance  of  trade," 
and  that  change  was  beneficial. 

Much  has  been  said  in  this  connection  about  the  Ala- 
bama  and  the  Florida.  I  fully  concur  with  those  who 
have  condemned  the  outrages  perpetrated  by  these  vessels. 
The  honorable  member  spoke  at  some  length  of  the  south- 
erly port  of  Nassau.  I  am  unable  to  discover  in  his 
remarks  upon  this  subject  any  adequate  reason  for  our 
injuring  ourselves  by  curtailing  or  destroying  a  profitable 
trade  with  the  colonies  in  North  America,  still  less  why  we 
should  not  endeavor  to  make  it  more  profitable  than  it  is, 
and  to  place  it  on  a  just  and  equitable  basis.  He  dis- 
cussed at  one  time  two  subjects  which  have  no  proper 
or  logical  connection  with  each  other.  All  such  inquiries 
as  I  have  been  able  to  make,  and  a  careful  study  of  a 
considerable  portion  of  the  organs  of  provincial  opinion, 
from  day  to  day,  since  the  beginning  of  the  war,  have  led 
me  to  the  result  that  although,  as  must  be  the  case  in 
every  country  where  freedom  of  thought  and  utterance 
prevail,  where  men  think  and  speak  for  themselves,  some 
will  be  right  and  some  will  be  wrong  (and  the  various 
minds  of  individual  colonists  have  arrived  at  very  differ- 
ent conclusions  as  to  the  present  war,  some  taking  the 
side  of  the  South,  some  friendly  to  the  North  and  ap- 
proving of  the  course  of  the  Administration,  and  some 
equally  friendly,  but  believing  that  a  different  policy 


96   OUR   COMMERCIAL   RELATIONS    WITH   CANADA. 

would  have  been  more  conducive  to  our  interest),  the 
flagrant  expressions  adverse  to  us,  and  which  sometimes 
obtain  wide  circulation,  are  the  words  only  of  individuals 
or  cliques,  and  not  of  the  vast  majority  or  masses  of  the 
people  of  these  provinces  on  whom  it  is  proposed  as  re- 
taliation to  inflict  commercial  injuries  which  will  equally 
injure  our  own  people,  before  we  have  made  any  effort 
to  remove  those  obstacles  which  some  years  after  the 
treaty  took  effect  have  prevented  each  nation  from  reap- 
ing the  full  benefits  which  would  naturally  have  accrued 
from  it.  I  have  already,  in  my  previous  remarks,  ex- 
plained the  operation  of  the  increased  tariffs  of  Canada, 
especially  of  the  tariff  of  1859.  These  enactments, 
which  substituted  artificial  restrictions  for  free  and  nat- 
ural laws,  should  not  be  mistaken  for  the  principles  or 
results  to  which  they  are  in  direct  contradiction.  I  am 
desirous  of  remedying  the  evils  thus  created. 

It  is  argued  that  the  treaty  has  deprived  us  of  rev- 
enue. During  the  last  year  the  imports  and  exports 
between  the  United  States  and  Canada  of  articles  free 
under  the  treaty  were  nearly  equal.  If  we  levy  duties 
on  their  productions,  they  may  do  the  same  on  ours. 
This  principle  is  a  two-edged  sword.  Or  they  may 
admit  our  products  free  of  duty,  as  they  did  before 
the  treaty,  and  thus  be  the  carriers  of  a  considerable 
portion  of  our  produce  as  well  as  of  their  own. 
When  a  revenue  was  paid  to  our  Government  on  Ca- 
nadian productions,  the  provincial  railroads  and  means 
of  communication  were  imperfect,  and  its  population 
was  comparatively  scanty.  By  renewing  the  duties  we 
shall  drive  away  the  trade  and  render  our  people  less 
able  to  pay  taxes.  The  utmost  amount  of  revenue  the 
Government  can  derive  from  duties  on  colonial  pro- 
ductions is  inconsiderable  compared  with  the  loss  of 
commerce  -we  shall  sustain,  and  the  consequent  loss  of 
employment  to  the  laborer  and  profit  to  the  merchant 
or  capitalist. 

Under  a  reciprocal  system,  instead  of  attempting  to 
make  money  by  restriction  and  injuries,  each  will  partake 
of  those  natural  advantages  which  have  appropriately 
and  eloquently  been  termed  "  the  gratuities  of  nature." 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   (J7 

Otherwise,  if  a  restrictive  policy  is  mutually  adopted,  we 
destroy  the  trade  of  such  ports  as  Oswego  and  Portland, 
and  two  or  three  men  will  be  employed  to  do  the  work  of 
one,  as  in  the  case  of  compelling  the  Canadians  to  carry 
sugar  from  Cuba  to  Toronto,  round  by  way  of  the  St. 
Lawrence  instead  of  carrying  it  ourselves  for  adequate 
remuneration  to  the  benefit  of  our  people,  through  New 
York,  Boston,  or  Portland ;  or  in  the  case  of  coal,  com- 
pelling the  people  of  each  country  to  carry  this  essential 
element  of  success  from  remote  mines,  hundreds  of  miles 
from  the  places  where  it  is  used.  It  is  as  necessary  to 
the  comfort  and  maintenance  of  the  poor  as  to  the  accu- 
mulations and  luxuries  of  the  rich.  It  saves  labor,  ena- 
bling one  man,  through  the  creation  and  application  of 
steam,  to  do  the  work  of  twenty.  Thus  it  creates  wealth 
and  power,  diffusing  its  beneficent  results  through  every 
department  of  society  on  each  side.  It  is  a  just  illustra- 
tion of  the  whole  subject.  Let  us  place  no  fetters  upon 
these  beneficial  exchanges,  nor  compel  the  people  of  either 
country  to  a  perpetual  system  of  labor  in  vain,  wasting 
in  circuitous  routes  the  labor  and  capital  which  might  be 
profitably  expended.  The  waste  of  labor  is  a  waste  of 
human  beings  and  of  life. 

As  to  smuggling,  which  it  is  said  exists  to  a  great  ex- 
tent on  our  frontier,  I  ask  if  it  is  likely  to  be  diminished 
by  the  increased  duties  created  by  our  own  recent  tariffs, 
or  by  entering  upon  a  system  of  commercial  hostilities 
with  the  whole  population  of  the  Provinces  and  stimu- 
lating all  their  sympathies  in  favor  of  the  smuggler. 
Neither  we  nor  they  are  alone  in  the  world,  or  can  carry 
out  in  all  respects  our  own  wishes  and  desires.  England 
and  France,  with  a  most  expensive  and  numerous  coast- 
guard, were  never  able  to  prevent  smuggling  except  by 
mutual  liberality.  Still  less  can  we  prevent  it  from 
countries  which  are  so  near  to  us  that  a  merchant  may 
have  one-half  of  his  store  in  the  United  States  and  the 
other  in  the  Provinces.  Already  two  free  ports  exist  in 
Canada.  All  goods  from  the  United  States,  from  France, 

I  Germany,  England,  and  all  other  parts  of  the  world,  are 
admitted  free  of  any  duty  into  these  ports,  which  are  not, 
as  might  be  inferred  from  their  names,  mere  cities.  One 


98   OUR   COMMERCIAL   RELATIONS   WITH   CANADA. 

of  them  in  the  Northeast  extends,  at  the  mouth  of  the  St. 
Lawrence,  over  a  sea-coast  twelve  or  fifteen  hundred  miles 
in  extent.  The  other  "  free  port  "  is  in  the  Northwest, 
and,  under  the  name  of  Sault  Ste.  Marie,  includes  prac- 
tically a  coast  on  Lake  Huron  and  Superior  and  their 
islands  of  more  than  one  thousand  miles  in  extent.  Do 
those  who  oppose  the  appointment  of  commissioners  and 
our  whole  system  of  reciprocity  think  it  is  wise  to  reject 
all  approach  to  ,any  unity  of  legislation  between  us  and 
the  Provinces,  and  impel  them  to  an  extension  of  any- 
thing like  this  system  of  free  ports,  which  already  ex- 
tends over  some  twenty -five  hundred  miles  of  coast,  until 
it  prevails  over  the  remainder  of  the  Provinces  ?  It  is  a 
case  where  each  Government  can  assist  the  other  or  in- 
jure it. 

Various  memorials  from  different  parts  of  the  United 
States  have  been  presented  to  Congress  and  referred  to 
the  Committee  on  Commerce.  They  proceed  from  persons 
having  distinct  interests,  and  living,  some  of  them  on  the 
western  and  some  of  them  on  the  eastern  extremity  of 
our  frontier.  Although  they  all  unite  in  requesting  mod- 
ifications of  the  treaty,  not  one  of  them  is  in  favor  of  its 
unconditional  abrogation.  There  is  no  exception.  The 
State  of  Maine,  in  March  last,  through  its  Legislature, 
passed  resolutions  decisively  in  favor  of  the  appointment 
of  commissioners  to  negotiate  a  more  extended  and  im- 
partial system  of  commercial  relations  with  the  provin- 
ces ;  and  in  my  opinion  scarcely  any  State  in  the  Union 
has  a  stronger  interest  in  a  liberal  settlement  of  this 
question. 

After  mature  deliberation,  the  Committee  on  Commerce 
believes  that  the  appointment  of  commissioners  on  both 
Bides  to  consult  together  as  to  the  course  most  conducive 
to  our  mutual  interest,  combines  more  advantages  than 
any  other  plan.  The  treaty  was  made  between  the 
United  States  and  Great  Britain,  but  as  regards  the  man- 
agement of  financial  affairs  the  colonies  are  independent 
of  Great  Britain.  More  than  this,  the  British  North 
American  colonies  of  Canada,  New  Brunswick,  Nova 
Scotia,  Prince  Edward's  Island,  and  Newfoundland  are 
commercially  distinct  and  independent  of  each  other. 


OUR   COMMERCIAL   RELATIONS   WITH   CANADA.   90 

each  placing  the  other  provinces,  and  the  United  States, 
Great  Britain,  France,  and  other  countries  upon  a  footing 
of  equality  as  regards  importations.  The  subject  in- 
volves on  our  side  an  adjustment  of  the  interests  of  the 
eastern,  central,  and  western  States — an  earnest  and  full 
consideration  of  the  course  best  adapted  to  promote 
manufactures,  agriculture,  and  commerce,  and  the  removal 
of  such  restrictions  as  exist,  by  means  of  the  legislation 
of  Canada,  inconsistent  with  the  general  expectations 
when  the  treaty  was  made.  No  other  plan  can  bring  the 
parties  whose  interests  are  involved  so  closely  and  directly 
into  communication  with  each  other,  and  its  importance 
demands  the  full  and  undivided  attention  of  able  and 
comprehensive  statesmen, 

I  will  say  in  addition,  that  the  terms  of  the  resolution 
do  not  seem  to  be  fully  understood.  The  resolution  con- 
templates that  the  notice  shall  be  given  at  the  proper 
time,  unless  in  the  interim  a  convention  shall  have  met 
and  agreed  upon  a  treaty  based  upon  the  true  principles 
of  reciprocity,  and  that  whenever  Great  Britain  shall  in- 
dicate a  willingness  to  enter  into  negotiations  for  that 
purpose,  the  President  is  authorized  to  appoint  commis- 
sioners to  ascertain  on  what  terms  such  treaty  can  be 
made. 


THE    TAKIFF, 


AND 


THE   TRUE   PRINCIPLES   OF   TAXATION. 


HOUSE  OF  REPRESENTATIVES,  June  2,  1864. 


When  this  speech  was  made  wild  and  inconsiderate  ideas  regard- 
ing the  tariff  had  reached  their  climax  in  Congress.  Inordinate 
indiscriminations,  abrupt  and  unstable  taxation,  were  the  practice 
of  the  times.  Mr.  Ward  advocated  such  a  tariff  upon  the  fewest 
articles  as  would  yield  the  largest  revenue  with  the  least  injury 
to  the  people.  Since  his  speech  was  delivered  many  changes 
have  been  made  in  accordance  with  these  views,  but  much  yet 
remains  to  be  done.  The  revenue  reformer  of  to-day  will  recognize 
in  it  an  enunciation  of  the  best  principles  of  taxation. 

ME.  CHAIRMAN  :  The  importance  of  proper  tax  and 
tariff  bills  is  evident.  The  present  financial  condition  of 
the  country  invites  our  earnest  attention,  and  every  effort 
should  be  made  to  maintain  the  public  credit.  A  funda- 
mental error  was  long  ago  committed  in  enacting  the  sys- 
tem of  legal  tender ;  and  the  earnest  convictions  of  many 
who  knew  better  than  to  depart  from  truth  and  reality 
have  been  changed  into  faint  scruples,  and  then  entirely 
overcome.  The  spectral  doctrine  that  we  can  make  money 
by  printing  it  has  superseded  the  dissolving  views  of  specie 
payments;  and  the  effect  of  all  the  redundancy  of  paper 
is  that  $100  in  gold  will  buy  national  securities  to  the 
amount  of  $190.  This  is  the  deliberate  estimate  placed 
upon  our  system,  our  credit,  our  honor,  and  the  policy  we 
are  pursuing  by  the  capitalists  of  our  own  country  and  of 
the  world. 

I  speak  of  things  as  they  are.  The  national  debt  is 
increasing,  and  will  continue  to  increase.  We  can  judge 
of  the  future  in  no  better  way  than  by  the  experience  of 


THE   TARIFF   AND   TAXATION.  101 

the  past ;  and  if  the  Secretary  of  the  Treasury  has  hither- 
to, when  the  prevailing  temper  of  the  people  has  natur- 
ally been  more  sanguine  and  enthusiastic  than  it  will  be 
hereafter,  found  himself  unable  to  place  any  larger  pro- 
portion of  the  public  debt  in  the  shape  of  permanent 
loans,  it  is  impossible  to  avoid  the  darkest  forebodings 
as  to  the  future.  Every  day  the  war  continues  we  grow 
poorer  and  poorer ;  the  most  vigorous  and  energetic  por- 
tion of  our  people,  those  who  are  best  capable  of  pro- 
ductive labor,  are  transferred  from  the  fields  of  ordinary 
industry  to  the  work  of  mutual  destruction,  and  their 
number  is  diminished  to  an  extent  which  already  has 
fearful  results  upon  the  actual  income  of  the  nation. 

We  must  treat  the  public  debt  as  something  to  be 
actually  paid.  We  must  treble  our  revenue  by  a  well- 
considered  system  of  taxation,  pressing  as  lightly  as  pos- 
sible upon  the  working  and  producing  classes,  and  we 
must  cease  to  inflate  the  currency  by  fictitious  values. 

k  There  is  no  subject  of  more  essential  and  permanent  im- 
portance to  the  people  than  this  collective  indebtedness. 
One  dollar  raised  by  taxation  is,  as  has  been  said  by  the 
Secretary  of  the  Treasury,  of  more  real  value  to )  the 
country  than  two  made  as  money  is  now  supposed  to  be 
made,  and  the  tariff  should  be  so  arranged  as  to  yield 

htlie  largest  possible  revenue  to  the  country  with  the  least 
possible  incovenience  to  the  people. 
When  the  war  is  over,  and  the  enthusiasm  and  passion 
it  has  created  and  kept  alive  have  subsided,  the  monu- 
ment of  debt  will  remain.  It  cannot  be  obliterated  by 
brave  words  and  patriotic  apostrophes.  The  public  credi- 
tor will  demand  that  the  mortgage  he  holds  upon  the 
bones  and  sinews  of  the  producing  population  shall  be 
satisfied  to  the  last  fraction.  Our  legislation,  therefore, 
should  tend  to  no  inflation  of  prices.  We  should  make 
our  money  go  as  far  as  we  can,  by  no  means  creating  arti- 
ficial values  and  incurring  liabilities  to  be  paid  when  the 
currency  will  l>e  measured  by  a  different  standard. 

For  my  own  part,  I  do  not  believe  it  is  now  possible 
to  end  this  war  without  having  incurred  a  debt  of  at 
least  $4,000,000,000.  Our  expenses  are  increasing  with 
the  rise  of  prices  and  the  increased  necessity  of  more 


102  THE   TARIFF    AND   TAXATION. 

vigorous  exertions.  Under  the  policy  we  have  adopted, 
no  spirit  of  reunion  with  us  at  present  exists  in  the 
Southern  Confederacy.  Some  of  its  people — many  of 
them — desire  peace ;  but  as  was  remarked  by  the  honor- 
able member  from  Maryland,  on  the  other  side  of  the 
House,  who  knows  them  well,  it  is  not  peace  and  union, 
but  peace  and  disunion.  They  desire  peace,  but  only  with 
victory  and  triumph  for  themselves  and  defeat  of  our 
forces.  Under  these  circumstances,  it  is  impossible  to 
foresee  how  long  the  war  will  continue  or  what  will  be 
its  ultimate  cost  in  money  or  in  men  ;  but,  in  my  judg- 
ment, the  debt  we  shall  incur  cannot  be  less  than  $4,000,- 
000,000,  and  may  be  far  more. 

I  take  it  for  granted  that,  under  the  policy  of  the  Ad- 
ministration, we  are  engaged  in  a  war  of  subjugation,  and 
I  assume,  for  the  purpose  of  this  argument,  that  the  party 
at  present  in  power  will  realize  its  wishes,  will  conquer 
and  forcibly  revolutionize,  by  external  force,  the  whole 
political,  social,  and  industrial  aystem  of  the  South,  in 
direct  opposition  to  the  opinions,  or,  if  we  choose  so  to 
call  them,  the  prejudices,  most  cherished  by  them — form- 
ing their  habits  and  the  basis  of  their  thoughts  and 
sentiments. 

Let  us  calculate  the  cost  of  retaining  the  fruits  of  the 
victories  we  have  yet  to  gain.  We  may  be  sure  that  we 
cannot  compel  a  population  numbering  eight  millions, 
and  equaling  ourselves  in  courage,  determination,  and  all 
the  essential  elements  of  military  character  and  power, 
to  submit  ta  the  absolute  control  of  our  Government  un- 
less we  have  a  standing  army  of  at  least  three  hundred 
thousand  men.  At  sea  we  shall  need  a  force  quite  as 
powerful  as  at  present.  Our  civil  list  will  be  increased 
by  the  large  number  of  officials  necessary  to  collect  the 
additional  revenue  required  for  the  support  of  the  Army 
and  Navy.  I  endeavor  to  estimate,  on  the  most  moder- 
ate basis,  the  amount  of  our  expenditure  when  such  a 
peace  as  is  sought  by  the  majority  of  this  House  shall  be 
attained.  We  shall  need  annually,  at  least,  for— 

The  War  Department $300,000,000 

The  Navy  Department 100,000,000 

Interest  on  public  debt,  of  say  $3,000,000,000 . .   180,000,000 


THE   TARIFF   AND   TAXATION.  103 

Civil  list,  collection  of   revenue,  foreign   inter- 
course, and  miscellaneous 40,000,000 

Interior,  pensions,  Indians,  &c 25,000,000 

Total $645,000,000 

If  the  South  should  willingly  return  to  the  Union,  we 
shall,  at  least,  need  an  army  of  a  hundred  thousand  men. 
Taking  this  estimate  and  reducing  the  cost  of  the  War 
Department  by  two-thirds,  there  will  yet  remain  the 
necessity  for  a  revenue  of  $450,000,000  to  be  paid  by 
taxation  and  duties. 

As  England  is  the  only  country  on  the  globe  which  is 
cursed  with  so  large  a  national  debt  as  we  shall  incur 
before  the  war  is  ended,  comparisons  are  often  made  with 
her  as  to  ability  to  pay  the  principal  and  endure  the  in- 
terest. What  are  the  facts?  The  real  and  personal 
property  of  the  British  Isles  is  stated  to  be  $32,0'.)0,000, 
000.  The  value  of  the  property,  both  real  and  personal, 
in  the  States  of  the  Union  which  are  supposed  to  adhere 
to  the  national  Government  is  about  $11,000,000,000,  and 
that,  of  the  other  States  is  little  more  than  $9,000,000,000. 
By  this  it  appears  that  Great  Britain  has,  reckoning  value 
in  ready  money,  three  times  as  much  property  as  the 
United  States ;  and  therefore  has,  in  this  respect,  three 
times  as  much  ability  to  pay  her  debt.  Ultimately,  as  our 
country  is  developed  and  our  population  augmented,  the 
relative  position  will  be  changed,  but  the  disparity  in  our 
present  resources  is  even  greater  than  this.  The  wealth  of 
Great  Britain  is  largely  in  manufactures  and  commerce, 
easily  convertible  into  cash,  and  paying  large  revenue 
upon  the  investment.  That  of  the  United  States  is  prin- 
cipally in  land  and  in  agriculture,  which  is  not  easily 
convertible  into  money,  and  which  pays  but  a  small  per 
cent,  upon  the  investment.  Great  Britain  has  immense 
colonies  in  all  parts  of  the  world,  whose  wealth  and  pro- 
ductive industry,  through  the  medium  of  her  commerce 
and  manufactures,  contribute  to  her  prosperity.  If  peace 
should  now  be  made,  it  would  be  three  times  more  diffi- 
cult for  the  United  States  to  pay  their  debt  than  for 
Great  Britain,  whose  statesmen  and  people,  in  conse- 


104  THE   TARIFF    AND   TAXATION. 

quence  of  the  vast  magnitude  of  the  obligation,  never 
expect  to  discharge  its  principal. 

Now,  sir,  let  us  look  at  the  interest  of  the  respective 
debts.  That  of  England  is  from  three  to  thrp.o  and  a 
half,  that  of  the  United  States  from  five  tc  seven  per 
cent.  The  interest  of  our  debt,  estimating  it  at  even 
$3,000,000,000,  will  be  $180,000,000,  while  the  interest 
on  the  British  debt  is  $140,000,000;  in  other  words, 
$180,000,000  interest  money  will  have  to  be  collected  off 
our  $11,000,000,000  of  property,  while  England  only 
collects  $140,000,000  from  her  $32,000,000,000  of  prop- 
erty.  The  burden  of  our  interest  will  therefore  be  three 
times  as  great  as  that  of  Great  Britain,  whose  debt  in 
this  comparison  with  ours  appears  light.  For  genera- 
tions to  come  the  laboring  men  of  the  United  States 
must  labor  for  several  hours  more  per  day.  They  must 
stint  themselves  and  their  families  in  necessary  comforts, 
not  to  speak  of  accustomed  and  almost  necessary  luxu- 
ries, in  order  to  repair  the  results  of  this  deplorable  war. 

I  have  mentioned  these  facts  because  it  has  been  too 
common  upon  the  floor  of  this  House  to  exaggerate  the 
manufacturing,  agricultural,  and  commercial  resources  of 
the  country,  so  far  as  regards  their  ability  to  bear  taxa- 
tion with  the  present  population,  after  the  vast  destruc- 
tion which  the  war  has  produced  among  the  most  valu- 
able classes  of  our  producers.  I  know  the  ultimate  mag- 
nitude of  our  resources,  but  no  true  and  wise  friend  of 
his  country  can  speak  of  our  appalling  debt  as  if  it  were 
an  affair  of  trifling  moment,  and  could  be  discharged  as 
readily  as  it  has  been  and  yet  continues  to  be  created.  I 
believe  there  is  a  disposition  on  the  part  of  the  people  to 
sustain  the  Government  in  this  war,  and  to  bear  the  just 
burdens  which  result  from  this  source.  It  is  of  vital 
moment  that  this  rebellion  should  be  put  down,  and  that 
the  problem  of  self-government  should  be  successfully 
solved.  The  revolt  is  an  attempt  on  the  part  of  the 
few  to  create  a  revolution  against  the  wishes  of  the 
many.  Jf  we  admit  the  right  of  secession,  there  is  an 
end  to  the  Government;  and  if  we  cannot  put  down 
the  rebellion,  this  Republic  will  cease  to  occupy  its 
proper  position  among  the  nations  of  the  world. 


THE   TARIFF   AND   TAXATION.  105 

I  believe,  Mr.  Chairman,  that  the  city  of  New  York  is 
willing  to  agree  to  any  just  tariff  to  meet  the  exigencies 
of  the  country.  But  all  the  communications  that  I  have 
received  on  the.  subject  are  to  the  effect  that  the  tariff 
should  be  for  revenue  and  not  prohibitory.  In  the  tax 
bill  I  noticed  some  peculiar  features  in  the  imposition  of 
taxes  where  taxation  was  injudicious.  It  passed  from  one 
extreme  to  another ;  from  a  disposition  to  tax  lightly,  it 
rushed  to  inordinate  and  indiscriminating  taxation.  The 
same  course  also  has  been  pursued  in  reference  to  this 
tariff  bill, 

I  pass  now  to  the  consideration  of  the  joint  resolution 
in  reference  to  the  tariff  which  passed  Congress  some 
time  since.  I  suppose  that  scarcely  ever  has  such  a  spec- 
tacle been  exhibited  in  any  legislative  body  so  free  and  so 
well  disposed  as  this.  The  joint  resolution  raised  the 
tariff  fifty  per  cent,  upon  all  articles,  without  regard  to 
what  effects  it  might  produce,  whom  it  might  injure,  or 
what  it  might  prohibit.  Some  articles  would  bear  the  in- 
creased taxation  and  others  would  not ;  yet  this  was  a 
tariff  to  continue  only  for  sixty  days,  and  included  goods 
in  bonded  warehouse  and  on  shipboard.  What  is  the 
effect  of  it  upon  goods  on  hand  ?  There  are  large  firms 
which,  upon  the  first  intimation  that  congressional  action 
was  expected,  probably  .took  from  the  custom-house  mer- 
chandise of  the  value  of  millions  and  millions  of  dollars. 
They  at  once  put  up  the  price  of  these  goods  at  rates  cor- 
responding to  this  new  tariff  of  fifty  per  cent.,  although 
they  paid  no  portion  of  the  increase;  while  others,  of 
smaller  pecuniary  means,  being  unable  to  remove  their 
property  from  the  warehouses  upon  such  a  brief  notice, 
were  compelled  to  pay  the  additional  duty.  Goods  on 
shipboard  were  also  subject  to  this  increase.  There  is  no 
equality  or  justice  in  such  hasty  action. 

I  object  on  behalf  of  the  great  interests  I  represent  to 
this  kind  of  abrupt,  unstable,  and  temporary  legislation. 
It  creates  a  feeling  of  danger  and  insecurity  exceedingly 
prejudicial  to  the  public  welfare.  Impose  a  tariff  fair 
and  ju-t,  exact  taxes  which  are  liberal,  and  my  constitu- 
ents will  submit  to  them  cheerfully;  but  what  I  ask  for 
them  is  that  they  shall  not  be  subjected  to  fluctuations 


106  THE  TARIFF    AND   TAXATION. 

in  legislation  which  shall  break  up  and  destroy  their 
trade. 

My  statements  may  he  illustrated  by  reference  to  our 
action  on  the  subject  of  taxing  liquors  on  hand,  a  subject 
which  is  very  familiar  to  this  House.  A  tax  of  forty 
cents  was  imposed  upon  whisky  on  hand,  and  in  con- 
formity with  the  general  tenor  of  these  measures  my  pro- 
posal in  this  House  to  exempt  foreign  liquors  which  were 
in  bonded  warehouses  or  on  shipboard  in  transitu  to  this 
country  was  defeated.  The  bill  passed  the  House,  went 
to  the  Senate,  passed  that  body  in  an  amended  form,  came 
back,  and  was  returned  to  the  Senate  again.  The  Senate 
finally  receded  from  their  amendments  to  which  we  had 
disagreed,  thus  striking  oir!  the  tax  on  domestic  whisky 
on  hand,  but  leaving  it  to  operate  upon  imported  liquors. 
Thus  our  importing  merchants  were  compelled  to  pay  a 
duty  or  tax  of  forty  cents  per  gallon  on  foreign  liquors 
on  hand. 

I  think  few  enactments  can  be  more  likely  to  alienate 
important  interests  from  the  support  of  the  constituted 
authorities  than  this  system  of  taxation.  No  Govern- 
ment can  afford  to  destroy  or  weaken  the  friendship  of 
those  who  support  it,  and  who  intend  to  support  it 
honestly,  fairly,  justly,  and  liberally.  The  measures  to 
which  I  have  referred  were  no  sooner  passed  than  a  dis- 
contented feeling  was  created.  And  now  to-day  that  tax 
of  forty  cents  on  foreign  liquors  on  hand  is  charged  to 
the  importers  of  New  York,  while  there  is  none  on  liquors 
of  domestic  manufacture.  I  opposed  and  voted  against 
the  imposition  of  any  tax  on  stock  on  hand.  I  believe  it 
would  have  been  far  better  for  the  Government  if  the 
House  had,  when  the  revenue  bill  was  reported,  promptly 
passed  the  bill  putting  a  liberal  tax  on  liquor  thereafter 
manufactured,  but  leaving  stock  on  hand  untouched.  We 
should  have  realized  a  larger  revenue,  for  we  should  not 
have  lost  two  months,  during  which  the  bill  was  pending 
between  the  two  Houses,  in  the  collection  of  additional 
taxes. 

I  have  seldom  thought  proper  to  quote  in  this  House 
from  articles  published  in  the  newspapers.  I  will,  how- 
ever, read  an  extract  from  an  article  published  in  one  of 


th< 


THE   TARIFF   AND   TAXATION.  107 


e  most  sound,  impartial,  reliable  journals  in  this  coun- 
try, entirely  in  conformity  with  my  own  views.  In 
speaking  of  this  tariff  resolution  it  says  : 

"  The  suddenness  and  absoluteness  of  this  sixty  days'  tariff 
savors  more  of  the  edict  of  some  absolute  monarch  than  the  acts 
of  representatives  of  a  free  people.  Not  the  least  consideration 
is  shown  for  the  convenience  of  traders,  although  they  are  the 
parties  to  whom  the  Government  has  to  look  for  its  chief  support. 
The  contracts  of  importers  are  totally  disregarded  :  and  they  are 
treated  as  though  they  had  no  other  business  than  to  pay  the 
levies  of  arbitrary  enactments.  Such  conduct  tends  to  convulse 
and  paralyze  legitimate  business ;  it  goes  on  the  supposition  that 
merchants  have  no  interests  that  ought  to  be  respected  by  the 
Government,  and  that  they  are  bound  to  submit  to  every  whim 
and  caprice  of  an  arbitrary  power  without  warning  or  redress. 
There  is  no  Government  in  Christendom  that,  in  these  days, 
would  be  found  guilty  of  such  discourtesy  and  injustice  toward 
foreign  traders  and  the  large  class  of  domestic  merchants  whose 
interests  are  interwoven  with  foreign  commerce.  Such  legisla- 
tion is  producing  the  most  serious  alarm  among  commerciarmen, 
and  wearing  their  affections  from  a  Government  which  they  have 
proudly  esteemed  as  the  truest  protector  of  commerce,  because 
the  truest  representative  of  the  people,  in  whom  all  the  interests 
of  commerce  are  invested." 

It  will  be  seen  that  there  is  a  great  deal  of  truth  and 
force  in  the  article.  Now,  all  I  ask  of  the  House  is  to  so 
adjust  the  tariff  duties  as  to  do  justice  to  my  region  as 
well  as  to  others.  I  am  willing  you  should  tax  liberally, 
but  to  whatever  extent  you  prohibit  or  prevent  the  im- 
portation of  foreign  goods  to  that  extent  you  diminish 
the  power  of  the  foreigner  to  purchase  the  products  of 
this  country.  We  injure  ourselves  when  we  injure  the 
foreign  1,-ibor.  I  am  willing  that  the  tariff  shall  be 
1  a rgely  increased  on  many  articles ;  but  I  ask  that  you 
shall  not  tax  articles  on  hand,  and  that  you  shall  not  by 
>  these  sudden  and  violent  changes  affect  the  great  in- 
terests of  the  country  disastrously. 

I  trust  before  this  session  closes  the  House  will  correct 
much  of  its  present  legislation.  If  you  do  that,  you  will 
appeal  powerfully  to  the  support  of  the  people  of  my  aec- 
tion.  The  interests  affected  are  too  great  to  be  treated 
hastily  with  immature  or  hostile  consideration.  Let  us 


108  THE   TARIFF   AND   TAXATION. 

not  make  rash  experiments  where  so  much  of  the  welfare 
of  our  country  is  at  stake.  We  passed  a  measure  called 
the  gold  bill  because  honorable  members  alleged  this 
would  put  down  the  price  of  gold ;  but  it  ought  to  have 
been  evident  to  every  member  of  this  House  that  the  sale 
of  $11,000,000  would  not  reduce  the  relative  value  of  the 
precious  metal.  The  steady  increase  in  price  is  caused 
by  the  inflation  of  the  currency,  and  until  that  is 
diminished  the  price  cannot  be  permanently  reduced. 
The  nominal  value  of  specie  did  not  go  down  upon  the 
passage  of  the  gold  bill,  but  continued  to  go  up,  and  it 
is,  I  believe,  to-day  at  a  premium  of  over  ninety  per  cent. 

The  House  took  alarm,  and  sought  by  legislation  to  do 
that  which  no  nation  in  the  world  has  ever  accomplished, 
to  reduce  the  price  of  gold  by  legislation.  But  as  the 
value  of  gold  in  comparison  to  paper  money  continued  to 
increase  steadily,  a  sort  of  panic  was  created  in  the  House, 
and  the  cry  was,  "  Tariff !  tariff !  tariff  !  "  "  Tax  !  tax  ! 
tax  ! "  This  was  done  indiscriminately.  I  ask  the  House 
to  deliberate  upon  these  questions,  affecting,  as  they  do 
all  the  interests  of  the  country.  I  trust  that  we  shall  not 
permit  ourselves  to  commit  injustice  because  gold  may 
have  gone  up  or  down.  Calm  and  deliberate  legislation 
is  absolutely  needed  in  an  emergency  like  this ;  I  ask  that 
we  shall  not  legislate  hastily  or  intemperately  on  any 
subject.  But,  as  men  comprehending  the  great  issue  be- 
fore the  country,  and  the  great  stake  involved  in  the 
gigantic  war  on  our  hands,  we  should  consider  measures 
carefully  in  all  their  aspects,  and -endeavor  to  raise  as 
large  a  revenue  as  possible  with  the  least  injustice  to 
any  interest. 

I  have  no  doubt  that  by  a  judicious  system  of  internal 
revenue,  and  by  duties  on  imports,  we  shall  be  able  to 
raise  in  time  a  sufficient  revenue  to  meet  the  exigencies  of 
the  country.  But  we  shall  certainly  gain  nothing  by 
such  a  course  of  legislation  as  we  have  pursued  for  the 
last  sixty  days.  Every  member  who  will  reflect  one  moment 
on  the  subject  must  see  that  it  is  far  better  for  us  to  be 
deliberative  rather  than  hasty,  and  to  examine  and  weigh 
well  every  measure,  and  see  what  are  to  be  its  results  and 
effects.  In  appealing  to  the  House  in  behalf  of  the  city 


THE   TARIFF    AND   TAXATION.  109 

of  New  York,  I  appeal  to  them  in  behalf  of  a  city  equal 
in  population  to  one  or  two  of  the  smaller  States  of  the 
Union,  and  in  behalf  of  a  community  that  has  a  large  and 
vital  interest  in  everything  affecting  the  preservation  of 
the  Union.  That  city  has  done  everything  in  its  power 
to  aid  the  Government,  and  will  continue  to  do  it  what- 
ever may  be  said  to  the  contrary. 

Now.  Mr.  Chairman,  with  regard  to  this  question  of 
taxation  and  tariff,  there  are  many  features  in  the  mod- 
ern policy  of  England,  enacted  there  by  the  earnest  ad- 
vocacy and  efforts  of  the  middle  and  laboring  classes, 
which,  I  think,  we  might  advantageously  adopt.  My 
colleague,  (Mr.  STEBBINS,)  whose  absence  I  regret,  said, 
in  substance,  during  his  remarks  on  the  tax  bill,  that  he 
was  in  favor  of  our  surrounding  ourselves  as  with  a 
Chinese  wall,  isolating  ourselves  from  all  foreign  commu- 
nication and  commerce,  and  making  ourselves,  as  it  were, 
a  self-sustaining  machine.  "  Prohibit,"  said  he,  "  the 
exportation  of  every  dollar  of.  gold  and  silver,  of  every 
bushel  of  grain  and  every  pound  of  beef  and  pork,  or 
adopt  the  policy  of  a  prohibitory  tariff.''  He  would 
"  hold  no  intercourse  with  foreign  nations  until  the  war 
was  over;  none  whatever."  In  my  judgment,  we  need 
all  the  support  we  can  derive  from  every  source,  and 
none  of  the  accustomed  supplies  should  be  cut  off.  We 
should  derive  all  the  strength  we  can  from  profitable 
commerce  as  well  as  agricultural  and  manufacturing  in- 
dustry. Perhaps  this  thought  also  was  suggested  to  the 
mind  of  my  colleague,  for  almost  in  the  next  breath  he 
told  us  that  we  should  derive  $100,000,000  from  such  an 
increase  of  the  duties  on  imports  as  would  not  be 
prohibitory.  It  would  be  a  very  unwise  policy  for  us  to 
isolate  ourselves  now  from  the  rest  of  the  world.  We 
are  in  a  position  when  we  cannot  well  afford  to  lose  the 
sympathies  of  the  people  of  foreign  nations,  especially 
when  so  great  an  effort  is  now  being  made  on  the  paid; 
of  the  Confederate  States  to  secure  them.  We  should 
not  needlessly  and  unprofitably  alienate  from  ourselves 
the  laboring  and  producing  population  of  other  coun- 
tries. 

What  I  understand  we  desire  to  attain  in  the  adoption 


110  THE   TARIFF   AND   TAXATION. 

of  a  new  tariff  system  in  this  country  is  to  secure  the 
most  revenue  in  the  best  way,  and  that  it  should  be 
derived  as  far  as  practicable  more  especially  from  articles 
of  luxury ;  and  while  my  friend  (Mr.  MOKEILL)  feels 
great  hostility  to  the  British  Government,  there  are  still 
certain  features  in  the  policy  of  that  Government  which 
I  presume  he  will  admit  we  may  follow  to  advantage  so 
far  as  they  are  beneficial  to  the  masses  of  the  people. 
Now,  in  Great  Britain,  the  receipts  in  1862  from  customs 
were  $120,000,000,  and  of  that  amount  ninety  per  cent, 
was  obtained  from  five  or  six  articles,  namely :  coffee, 
tea,  sugar,  spirituous  liquors,  and  tobacco,  as  will  appear 
in  the  following  statement : 

The  revenue  of  the  United  Kingdom  in  1862  was  about 
$355,000,000,  and  was  derived  as  follows : 

Customs $120,000,000 

Excise 90,000,000 

Stamps 45,000,000 

Lands  and  assessed  taxes 15,000,000 

Property  tax 55,000,000 

Post  Office 19,000,000 

Other  receipts 12,000,000 

Total $355,000,000 

Of  the  receipts  from  customs,  ninety  per  cent,  are  ob- 
tained from  six  articles,  namely,  coffee,  spirits,  sugar, 
tea,  tobacco,  and  wines,  as  will  appear  from  the  following 
statement : 

Coffee,  duty  6  cents  per  pound $  2,000,000 

Spirits,  duty  $2  50  per  gallon 13,000,000 

Sugar,  duty  3  cents  per  pound 33,000,000 

Tea, 'duty  35  cents  per  pound 28,000,000 

Tobacco,  duty  75  cents  per  pound 28,000,000 

Wines,  duty  50  cents  per  gallon 5,000,000 

Six  articles $109,000  000 

All  other  articles , 11,000,000 


Total $120,000,000 

• 

The  authentic  accounts  show  some  remarkable  facts. 


I 


THE   TARIFF   AND   TAXATION.  HI 


Of  the  whole  revenue  of  $355,000,000,  spirits  contribute 
$63,000,000,  or  17J  per  cent.;  beer  contributes  $30,000,- 
000,  or  8£  per  cent. ;  tea  and  coffee  contribute  $30,000,- 
000,  or  8i  per  cent. ;  tobacco  contributes  $28,000,000,  or 
8  per  cent. ;  sugar  contributes  $33,000,000,  or  9  per  cent. ; 
wine  contributes  $5,000,000,  or  1J  per  cent. ;  stamps  con- 
tribute $45,000,000,  or  12£  per  cent. ;  income  and  prop- 
erty contribute  $55,000,000,  or  15^  per  cent.;  land  tax 
contributes  $6,000,000,  or  1£  per  cent. ;  excise,  besides 
spirits,  contributes  $10,000,000,  or  2£  per  cent.  ;  post 
office  contributes  $18,000,000,  or  5  per  cent. ;  assessed 
taxes  contribute  $9,000,000,  or  2£  per  cent. ;  sundries 
contribute  $23,000,000,  or  6£  per  cent. 

The  whole  amount  of  revenue  in  Great  Britain  is  double 
the  amount  of  circulation,  thus  disposing  of  an  alleged 
necessity  for  a  great  expansion  of  currency  in  order  to 
collect  high  taxes. 

One  of  the  objects  of  a  tariff  bill,  as  of  every  descrip- 
tion of  tax  bill,  is  to  realize  as  large  an  amount  as  can  be 
raised  on  articles  of  luxury,  to  simplify  the  whole  sys- 
tem, to  diminish  the  expense  of  collection,  prevent  smug- 
gling or  illegal  trade,  and  subject  the  public  to  as  little 
>  vexation  and  inconvenience,  as  few  unnecessary  burdens 
as  possible,  to  relieve  the  masses  of  the  people  as  far  as 
possible  from  any  increased  price  in  the  necessary  articles 
of  living ;  but  we,  on  the  contrary,  as  will  be  noticed  by 
this  bill  now  before  us,  propose  to  put  a  tariff  upon  almost 
every  article  that  is  imported. 

I  hope  this  House  will  endeavor,  in  the  course  they  may 
pursue  in  regard  to  this  and  every  other  measure  affecting 
the  revenue,  to  adopt  such  a  policy  as  will  enable  me  to 
support  the  bill.  At  the  proper  time  I  shall  move  some 
amendments  to  the  different  sections  of  the  bill,  and  I 
hope  it  may  be  so  amended  as  to  obviate  the  objections 
which  now  present  themselves  to  my  mind. 


THE 

TREATY    WITH    THE    HAWAIIAN    ISLANDS: 

ITS  RELATIONS  TO  OUR  NATIONAL  COMMERCE. 


HOUSE  OF  REPRESENTATIVES,  March  4,  1876. 


Through  a  singular  combination  of  circumstances  a  commercial 
treaty  with  the  Hawaiian  Islands  had  been  advised  by  a  large 
majority  in  the  Senate.  Mr.  Ward  advocated  its  approval  and 
the  appropriate  legislation  in  the  House,  as  it  would  to  some  ex- 
tent open  a  market  for  our  manufacturers  and  furnish  freight 
for  our  shipping.  Regarding  the  completion  of  a  canal  through 
the  Isthmus  of  Darien,  as  a  question  only  of  time,  and  as  China 
and  Japan  are  among  our  chief  fields  for  commercial  and  manu- 
facturing enterprise,  he  believed  it  to  be  important  that  we  should 
have  friendly  naval  stations  in  the  Pacific  Ocean,  but  he  sup- 
ported the  treaty  most  earnestly  on  the  ground  that  it  would 
direct  attention  to  our  incomparably  more  important  relations 
with  Canada,  Mexico,  and  Cuba,  and  might  serve  as  a  precedent 
for  an  extension  of  them. 

MR.  SPEAKER  :  I  have  observed  with  much  pleasure 
that  the  convention  for  the  extension  of  the  trade  of  the 
United  States  with  the  Hawaiian  Islands  was  advised 
in  the  Senate  by  the  triumphant  majority  of  fifty-one 
against  twelve  votes,  and  has  been  sent  to  this  House  for 
its  approval  and  the  appropriate  legislation.  Under  the 
policy  which  has  now  for  many  years  controlled  the  le- 
gislation of  this  country,  the  industry  of  the  people  has 
been  unduly  diverted  to  manufacturing  pursuits.  Over- 
production and  a  want  of  employment  have  followed. 
For  the  present  the  home  demand  can  scarcely  be  in- 
creased, and  it  has  become  incumbent  on  Congress  to  do 
whatever  is  fairly  in  its  power  to  open  or  extend  markets 
abroad.  This  is  one  of  the  direct  results  which  will  be 
accomplished  by  the  proposed  treaty,  and  hence  it  should 


TREATY   WITH   HAWAIIAN   ISLANDS. 

be  supported  by  the  representatives  of  the  people  with- 
out distinction  of  party. 

The  treaty  also  provides  for  the  admission  of  certain 
articles,  and,  notably,  unrefined  sugar,  into  the  United 
States,  free  of  duties.  It  cannot  be  expected  that  com- 
mercial privileges,  such  as  we  shall  obtain  if  the  treaty 
should  be  fully  confirmed,  can  be  accorded  to  us 
without  some  equivalent.  At  the  same  time  it  is  clear 
to  me  that  the  advantages  given  to  the  people  of  the 
Hawaiian  Islands  by  the  proposed  arrangement  are  also 
advantages  to  ourselves.  By  the  stimulus  given  to  in 
dustry  in  the  islands  an  increased  demand  not  only  for 
our  manufactures,  but  also  for  our  agricultural  produc- 
tions, most  of  which  are  essentially  different  from  those  of 
the  tropics,  will  be  created,  and  the  mutually  beneficial 

(exchange  will  be  effected  by  our  own  sailors  and  ships, 
thus  giving  another  impetus  to  our  national  progress. 
The  discussions  which  have  engaged  so  large  a  share  of 
public  attention,  as  to  the  opposing  doctrines  of  free  trade 
and  "  protection,"  are  now  of  diminished  importance. 
The  taxation  needed  for  the  expenses  of  government  and 

»  interest  on  the  national  debt  is  already  so  burdensome  that 
argument  as  to  the  expediency  of  levying  further  taxes  on 
the  many  for  the  benefit  of  the  few  should,  by  common 
consent,  be  postponed.  Revenue,  with  the  least  possible 
injury  to  the  people,  is  the  proper  object  of  the  tariff. 

So  long  as  our  observation  of  the  prices  we  are  com- 
pelled to  pay  on  the  articles  we  use  or  consume  is  con- 
fined to  our  own  country  only,  we  lose  sight  of  their  inju- 
rious effect.  When  we  compare  prices  in  our  own  country 
with  those  of  the  world  at  large,  we  ascertain  our  condi- 
tion with  tolerable  precision.  The  competition  to  which 
our  shipping  is  subjected  on  the  ocean,  in  trade  with  other 
<•<•  nnt  ries,  affords  a  strong  illustration  of  this  rule.  Be- 
fore 1860,  seventy -five  or  eighty  per  cent,  of  our  foreign 
commerce  was  in  American  vessels.  The  proportions  are 
n«»w  almost  literally  reversed,  over  seventy -two  per  cent. 
IMMIIIJ  carried  in  the  vessels  of  other  countries.  Of  our 
whole  foreign  carrying  trade  little  more  than  one-fourth 
is  under  our  own  flag.  The  earnings  of  the  trade  were 
recently  estimated  by  the  Secretary  of  the  Treasury  to  be 
8 


114  TREATY   WITH   HAWAIIAN   ISLANDS. 

more  than  a  hundred  million  of  dollars  yearly.  In  1872, 
the  amount  paid  to  foreign  steamships  for  freight  and 
passage  money  was  $134,742,441.  When  we  consider  that 
such  sums  are  paid  annually,  and  that  our  ship-owners, 
sailors,  and  others  formerly  enjoyed  the  pre-eminence  and 
chief  profits  in  a  trade  now  so  nearly  monopolized  by  for- 
eigners, it  is  plain  that  a  liberal  and  comprehensive  change 
is  needed  in  legislation.  Upon  similar  principles,  judici- 
ously applied,  a  strong  stimulus  could  be  given  to  the  ex- 
ports of  many  manufactures,  and  the  additional  labor 
employed  in  their  production  would  increase  the  demand 
for  agricultural  products  and  the  home  consumption  of 
those  manufactures  to  which  the  condition  of  our  country 
is  specially  adapted. 

The  theory  of  protecting  and  encouraging  industry  by 
high  duties,  levied,  in  the  main,  upon  the  industrious,  has 
long  been  tried,  while  no  legislative  efforts  have  been 
made  to  attain  the  same  object  by  the  judicious  applica- 
tion of  the  lowest  taxation  consistent  with  the  needful  rev- 
enue. While  our  tariff  levies  duties  on  nearly  twenty-five 
hundred  different  and  distinctly  enumerated  articles  or 
classes  of  articles,  the  whole  British  tariff  includes  only 
fourteen  ;  all  others  are  supplied  to  her  consumers  free  of 
duty.  Although  we  cannot  yet  attain  the  same  simplicity, 
it  would  be  wise  to  take  steps  in  that  direction.  Whenever 
a  revision  of  our  tariff  takes  place,  as  it  must  at  no  distant 
day,  whatever  diminution  of  revenue  may  be  caused  by 
the  Hawaiian  treaty  will  be  unimportant  in  comparison 
with  the  benefits  derived  by  the  country  at  large. 

While  some  diminution  of  our  revenue  on  certain  arti- 
cles may  be  expected  to  follow  the  removal  of  duties  as 
required  by  the  treaty,  I  have  yet  to  learn  that  taxation 
is  the  chief  purpose  of  government,  which  is  instituted 
and  maintained  for  the  benefit  of  our  citizens.  The  money 
which  might  be  taken  by  the  custom-house  officials  from 
the  pockets  of  our  citizens  will  be  spent  in  other  articles, 
many  of  them  yielding  revenue  to  the  Government,  or  be 
re-invested  in  industrial  pursuits,  productive  of  the  pros- 
perity and  wealth  which  are  the  surest  sources  of  national 
income,  and  enable  the  people  to  pay  necessary  taxes 
without  repining. 


TREATY   WITH   HAWAIIAN   ISLANDS.  115 

The  advantages  of  the  treaty  are  in  some  degree  local. 
They  will  accrue  primarily  and  for  the  present  chiefly  to 
the  benefit  of  our  fellow-citizens  on  the  Pacific  coast.  But 
that  is  a  narrow,  unwise,  and  destructive  statesmanship 
which  would,  on  such  grounds,  lead  those  who  live  in 
other  parts  of  the  Union  to  regard  the  treaty  with  in- 
difference or,  yet  worse,  endeavor  to  prevent  its  provi- 
sions from  becoming  part  of  the  laws  of  the  Union.  One 
of  the  cardinal  principles  of  our  legislation  should  always 
be  no  less  to  promote  the  legitimate  interests  of  each  part 
of  our  country  than  to  protect  it  from  attack  by  foreign 
foes,  and  I  know  of  no  more  probable  source  of  future 
danger  than  neglect  of  this  obvious  duty.  The  welfare 
of  the  whole  Union  is  intimately  connected  and  bound 
up  with  that  of  every  State.  If  one  member  suffers,  all 
in  fact  suffer  with  it,  and  apart  even  from  all  ties  of 
sentiment  and  their  very  important  results,  each  has  a 
material  profit  from  the  prosperity  of  the  others. 

The  manufactured,  agricultural,  and  mineral  produc- 
tions to  be  admitted  under  the  treaty  free  of  duty  into 
the  Hawaiian  Islands  will,  to  a  very  considerable  extent, 
be  brought  from  the  Atlantic  coast  and  all  other  parts 
of  the  Union.  Yet  even  this  view  of  the  subject  is  not 
tli at  which  is  most  important  to  the  nation  at  large. 
Placed  as  our  continent  is,  midway  between  the  leading 
commercial  nations  on  the  European  side  of  the  Atlantic 
and  those  oriental  realms  whose  trade  has  always  en- 
riched those  who  have  obtained  it,  and  is  now  one  of  the 
chief  objects  of  solicitude  and  competition  among  the 
different  states  of  Europe,  it  is  to  what  has  been  usually 
termed  "the  Ka-t,"  but  is  to  us  the  West — the  region  on 
the  other  great  continent  fronting  our  Pacific  coast — and 
to  South  America  that  we  must  look  for  the  natural 
oga  Tor  our  manufacturing  ingenuity  and  enter- 
priaa 

The  purchase  of  a  preponderating  interest  in  the  Suez 
Canal  has  ju-tly  been  regarded  as  a  masterpiece  of  states- 
m:;n<hij»  and  far-seeing  policy  on  the  part  of  Great  Bri- 
tain. Its  object  is  to  maintain  for  that  country  its 
supremacy  in  oriental  trade.  I  regard  the  treaty  with 
the  Hawaiian  I-lands  as  scarcely  less  important  to  our 


116  TREATY   WITH   HAWAIIAN   ISLANDS. 

people  than  the  control  of  the  Suez  Canal  is  to  Brit- 
ish subjects.  China  and  Japan  are  among  the  chief 
fields  for  our  commercial  and  manufacturing  enterprise, 
and  it  is  of  the  utmost  importance  that  we  should  possess 
adequate  naval  stations  in  the  Pacific  Ocean. 

It  is  also  our  duty  to  legislate  with  due  regard  to  the 
more  remote  future.  Vast  as  the  difficulties  attending 
the  opening  of  a  ship-canal  between  the  Atlantic  and 
Pacific  Oceans  undoubtedly  are,  the  resources  of  modern 
science  make  the  whole  question  one  simply  of  cost,  and 
the  benefits  which  would  demons trably  result  from  it  to 
the  commerce  of  the  world,  and  especially  to  that  of  the 
United  States,  prove  that  the  necessary  expenditures 
would  be  amply  remunerative. 

By  the  completion  of  this  great  work  remote  nations 
would,  for  all  practical  purposes,  be  brought  nearer  the 
commercial  centres  of  the  world  by  thousands  of  miles, 
and  the  trade  of  the  globe  would  receive  a  stronger 
stimulus  than  has  ever  before  been  given  to  it.  The  Suez 
Canal  itself  could  never  compete  successfully  with  such 
a  work,  not  only  for  the  exchanges  of  this  continent, 
through  part  of  which  it  would  pass,  but  for  those  of 
many  other  nations ;  the  passage  by  the  Mediterranean 
and  Red  Seas  being  too  uncertain  to  be  used  extensively 
by  sailing  vessels  whenever  means  of  communication 
through  the  American  isthmus  are  established. 

Recent  surveys,  carefully  made  by  oificers  of  the  United 
States,  show  that  a  ship-canal  through  the  American 
isthmus  is  practicable,  and  its  completion  is  only  a  ques- 
tion of  time.  When  that  period  arrives,  enormous  and 
unprecedented  changes  will  take  place  in  the  commerce 
of  the  world,  and  our  maritime  interests  will  acquire  an 
importance  incalculably  exceeding  any  they  have  ever 
yet  attained.  Although  the  benefits  will  affect  mankind 
at  large,  they  must  accrue  to  the  people  of  this  country 
far  more  extensively  than  to  those  of  any  other.  It  is  in 
this  view  of  a  certain  and,  historically  speaking,  not  dis- 
tant future  that  the  real  value  becomes  apparent  of  such 
safe  and  convenient  harbors  on  the  track  of  our  commerce 
in  the  Pacific  as  the  Hawaiian  Islands  afford.  Hence, 
the  proposed  treaty  is  of  far  greater  concern  to  us  than 


TREATY   WITH   HAWAIIAN   ISLANDS. 


117 


in  the  mere  exchange  of  the  commodities  specified  by  it 
His  Hawaiian  Majesty  stipulates  that  during  the  continu- 
ance of  the  treaty  he  will  not  lease  or  alienate  any  port, 
harbor,  or  other  territory  in  his  dominions  to  any  other 
power  or  government.  By  its  adoption  the  interests  of 
the  United  States  are,  as  far  as  is  at  present  practicable, 
established  in  the  islands. 

For  these  reasons  I  regard  the  Hawaiian  Islands, 
alt  IK  >ugh  no  part  of  this  continent,  yet  as  commercially, 
politically,  and  in  fact  as  part  of  its  appurtenances,  and 
to  be  properly  included  in  the  application  of  the  Monroe 
doctrine,  prohibiting  the  intervention  of  European  pow- 
ers in  them.  Of  this  it  was  well  said  by  President 
Johnson  in  his  message  of  December  5,  1865,  that  it  has, 
as  law,  been  "  sanctioned  by  time,  and  by  its  good  results 
has  approved  itself  to  both  continents."  We  all  remem- 
ber how  Mr.  Seward,  soon  after  the  civil  war  had  ceased, 
asserted  this  doctrine,  and  urged  the  evacuation  of  Mexico 
by  the  French  in  language  addressed  to  our  minister  in 
France,  and  not  the  less  significant  because  it  was  duly 
courteous.  u  We  shall,"  he  said,  "be  gratified  when  the 
Emperor  shall,  either  through  the  channel  of  your  es- 
teemed correspondence  or  otherwise,  give  definite  infor- 
mation of  the  time  when  French  military  operations  may 
be  expected  to  cease  in  Mexico."  We  all  know  the  aus- 
picious events  which  followed  as  the  practical  result  of 
this  national  assertion.  In  my  judgment  the  proposed 
treaty  with  the  Hawaiian  Islands  has  a  similar  tendency. 
If  \ve  refuse,  it  is  certain  that  they  will  form  at  least 
commercial  alliances  with  Great  Britain  and  her  colonies, 
and  such  an  opportunity  as  now  presents  itself  will  be 
L>-i  t  <  >  us  forever.  In  a  naval  and  military  point  of  view, 
many  of  our  highest  authorities  have  repeatedly  warned 
11-  not  to  permit  the  islands  to  pass  into  the  hands  of  any 
foreign  power. 

It  appears  to  me  that  however  just  and  proper  and 
irratilx  ini:  to  an  honorable  national  pride  the  Monroe  doc- 
trine in  itxrlf  may  !»<•,  it.  is  imperfect  and  little  more  than 
a  lianvn  ideality,  unless,  in  an  enlightened  self-interest, 
we  associate  it  with  a  friendly  care  for  the  commercial 
and  material  prosperity  of  the  states  we  have  so  far  taken 


118  TREATY  WITH   HAWAIIAN   ISLANDS. 

under  our  protection.  If  we  prohibit  the  interference  of 
European  nations  with  the  states  of  this  continent,  shall 
we  stop  at  that  point  and  cultivate  no  further  increase  of 
friendly  relations  with  them  ?  I  for  one  have  the  strong- 
est possible  faith  in  the  manifest  destiny  of  our  people, 
and  that  a  series  of  united  states  will  exist  from  the  cold 
regions  of  the  north,  so  far  as  they  can  be  inhabited  by 
civilized  man,  down  to  the  southern  verge  of  the  Amer- 
ican continent,  and  include  the  islands  adjacent  to  it. 
We,  with  our  rapidly  increasing  40,000,000  of  people, 
shall  be,  so  to  speak,  the  key-stone  of  the  arch — no  bar- 
rier in  the  way  of  intercourse,  but  doing  all  we  can  to 
facilitate  it,  we  ourselves  necessarily  partaking,  at  least 
to  as  high  a  degree  as  any  others,  in  the  prosperity  which 
would  thus  be  inaugurated  and  established. 

The  progress  of  this  manifest  destiny,  however  much  it 
may  have  been  delayed  by  events  which  none  can  lament 
more  deeply  than  I  do,  is  now  perhaps  the  most  impor- 
tant of  all  the  problems  in  our  future.  How  shall  it  be 
consummated  ?  Manifestly,  it  would  not  be  creditable  to 
us,  and  it  should  be  abhorrent  to  our  desires,  to  work  it 
out  by  means  of  the  cruelties,  barbarities,  and  piratic 
robberies  of  war.  Nor  should  it  be  done  by  the  ever 
corrupt  and  corrupting  influences  of  purchase,  by  taking 
money  from  the  pockets  of  our  already  overburdened 
people  to  bribe  others  to  enter  into  the  Union  and  partake 
with  us  of  what,  if  we  are  true  to  ourselves  and  posterity, 
are  its  inestimable  privileges.  Let  us,  by  the  force  of 
those  necessities  which  compel  men  to.  seek  interchange- 
able supplies,  exchange  the  products  of  their  industry, 
attract  the  neighboring  states  to  ourselves  and  each 
other,  reversing  the  policy  of  oppressors,  which  has  ever 
been  to  divide  mankind  and  keep  them  separate,  that  they 
might  the  more  easily  conquer  and  command  them.  In 
this  way  the  consummation  of  our  manifest  destiny  will 
be  solved  in  accordance  with  the  principles  of  the  highest 
civilization.  It  is  more  than  doubtful  if  in  any  other 
manner  it  can  ever  be  accomplished  at  all. 

The  policy  I  have  described  could  not  fail  to  command 
the  admiration  and  good-will  of  liberal  and  enlightened 
statesmen  throughout  the  world.  I  commend  to  your  at- 


TREATY    WITH   HAWAIIAN   ISLANDS.  119 

t< -nt ion  the  wise  and  noble  thoughts  of  John  Bright,  ex- 
pressed in  the  British  Parliament,  on  the  development  of 
the  Monroe  doctrine  in  a  civilized  and  unobjectionable 
form,  throughout  the  whole  length  and  breadth  of  the 
American  continent  and  the  adjacent  islands.  In  reply 
to  Sir  Edward  Bulwer  Lytton,  Mr.  Bright  said: 

There  cannot  he  a  meaner  motive  than  this  that  1  am  speaking 
of  in  forming  a  judgment  on  this  question,  that  it  is  "  better  for 
us  "  (meaning  the  people  of  Great  Britain)  that  the  American 
continent  should  he  as  the  continent  of  Europe  is,  severed  into  many 
Mutes  :uul  subject  to  all  the  contentions  and  disasters  which  have 
accompanied  the  history  of  the  states  of  Europe. 

I  should  say  that,  ir  a  man  had  a  great  heart  within  him,  he 
would  rather  look  forward  to  the  day  when  from  that  point  of 
land  which  is  habitable  nearest  to  the  pole  to  the  shores  of  the 
great  gulf,  the  whole  of  that  vast  continent  might  become  one 
irivat  federation  of  states,  that,  without  a  great  army  and  without 
it  navy,  not  mixing  itself  up  with  the  entanglements  of  Eu- 
ropean politics,  without  a  custom-house  inside  through  the  whole 
i  und  breadth  of  its  territory,  but  with  freedom  everywhere, 
C'j.iality  everywhere,  law  everywhere,  peace  everywhere,  would 
atl<»rd  at  least  some  hope  that  man  is  not  forsaken  of  heaven,  and 
that  the  future  of  our  race  might  be  better  than  the  past. 

Without  pursuing  the  comparison  in  detail,  it  is  un- 
<{ii< -tionable  that  if  our  commerce  with  the  Hawaiian 
Islands  is  worthy  of  special  attention,  that  with  the  Do- 
minion of  Canada  is  almost  incalculably  more  so ;  and 
tin-  argument  loses  nothing  of  its  force,  either  commer- 
cially or  politically,  when  we  consider  the  limited  area  of 
the  islands  and  the  vast  territory  of  the  Dominion  to  be 
inhabited  by  people  who  are  sprung  like  ourselves  from 
the  f on-most  nations  of  the  Old  World,  and  whose  num- 
bers will  be  computed  by  the  hundreds  of  millions. 

Our  commercial  relations  with  the  southern  countries 
of  tlii-  ci>n  tii  lent  have  lon<j  been  unsatisfactory.  By  ex- 
tend inir  our  exchanges  witn  them  we  should  acquire  the 
chief  benefits  of  actual  ownership  without  its  disadvanta- 
Axlditiona]  capital  would  be  attracted  to  Mexico 
and  Central  America.  Labor  in  those  countries  would 
meet  uith  more  remunerative  and  regular  employment. 
Thus  au  antidote  would  be  provided  to  restless  insubordi- 
nation and  want  of  steady  industry.  Personal  intercourse 


120  TREATY   WITH   HAWAIIAN   ISLANDS. 

among  the  inhabitants  of  the  different  portions  of  the 
continent  would  be  incalculably  promoted.  The  attrition 
would  destroy  mutual  prejudices.  Migration  would  take 
place  to  and  fro  between  distant  regions.  As  the  indus- 
try of  the  inhabitants  of  every  part  would  be  more  amply 
remunerated,  they  would  be  enabled  to  buy  more  largely 
from  each  other.  We  being  the  most  advanced  manufac- 
turers on  this  continent,  the  chief  share  of  increase  in  the 
sale  of  manufactured  articles  would  accrue  to  us  ;  but  all 
would  be  benefited.  The  prices  of  articles  of  tropical 
origin  to  the  people  of  the  United  States  and  Canada 
would  be  diminished.  Thus  the  cost  of  living  and  of 
production  would  be  reduced ;  industry  throughout  the 
continent  would  be  encouraged  by  the  extension  of  our 
markets,  and  would  be  enabled  better  to  compete  abroad 
with  other  countries.  No  other  course,  so  readily  adopt- 
ed, would  tend  so  much  to  diffuse  the  ideas  and  industrial 
habits  of  the  northern  and  most  advanced  nations  of  the 
world. 

Commerce  with  Cuba  has  long  been  in  a  very  unsatis- 
factory condition.  -Our  importations  from  her  in  1874 
amounted  to  the  large  sum  of  $86,272,466,  while  our  ex- 
ports of  domestic  origin  to  her  were  only  $19,597,981 ; 
the  balance  of  $66,674,485 — except  less  than  two  mil- 
lions of  foreign  goods  exported  from  this  country — was 
necessarily  paid  in  gold  or  its  equivalent  in  bills  of  ex- 
change on  other  countries.  ISTo  point  in  our  foreign  rela- 
tions is  more  worthy  of  attention  than  this.  The  vast 
sum  thus  paid  yearly  to  Cuba  would  soon  enable  us  to 
resume  specie  payments  if  we  could  pay  it  in  the  products 
of  our  industry  in  other  forms.  It  is  believed  that  much 
might  be  done  in  this  direction  by  an  honorable  treaty 
with  Spain,  tending  not  only  to  the  commercial  benefit  of 
all  parties  concerned,  but  to  terminate  the  unfortunate  re- 
lations between  her  and  Cuba  by  harmonizing  their 
mutual  interests. 

This  belief  derives  additional  strength  from  the  state- 
ment made  some  years  ago  on  official  authority,  that  in  the 
project  of  a  treaty  drawn  up  by  the  Spanish  minister  at 
Washington,  arrangements  were  suggested  for  an  exten- 
sive reciprocity  of  trade  between  the  United  States  and 


TREATY   WITH   HAWAIIAN   ISLANDS.  121 

Cuba  as  a  satisfactory  solution  of  difficulties  existing  at 
that  time. 

The  people  and  government  of  Mexico,  and  those  of 
Canada,  are  undoubtedly  desirous  of  wider  commercial 
intercourse  with  us.  Our  trade  with  those  countries,  if 
relieved  from  unnatural  obstacles,  would  certainly  attain 
i^i --antic  proportions  at  no  distant  day.  We  should  not 
covet  their  territory,  but  desire  their  trade  and  the  harmo- 
nious development  of  our  various  resources,  leaving  us 
free  from  the  responsibilities  and  burden  of  managing  their 
affairs ;  and  least  of  all  should  we,  by  money  wrung  from 
the  earnings  of  our  already  overtaxed  citizens,  endeavor 
to  annex  foreign  territory,  or  any  part  of  it,  and  give 
others  a  share  in  governing  us.  The  certainty  of  an  eco- 
nomical, free,  and  pure  government  should  be  the  attrac- 
tion on  which  we  rely.  Admission  into  the  Union  should 
be  regarded  as  a  privilege,  not  as  a  matter  of  bargain  and 
sale. 

The  trade  we  might  soon  have  with  Mexico  is  of  incal- 
culable importance.  She  is  capable  of  supplying  our 
rap idly  increasing  population  with  tropical  productions 
for  centuries  to  come.  Last  year  our  imports  of  the 
products  of  the  sugarcane  from  Cuba  alone  amounted  to 
$75,728,448,  while  those  from  all  other  countries  were  only 
$17,120,755.  Yet  the  supply  of  these  necessary  articles 
from  Cuba  is  liable  to  be  cut  off  almost  at  any  time  by 
the  emancipation  of  the  slaves  through  whose  labor  it  is 
produced.  The  same  immediate  results  which  followed 
emancipation  in  the  other  West  Indian  islands  must  be 
cxjM-ctrd  in  Cuba.  It  is  therefore  advisable  that,  with 
wi>»'  i'«  >ivM-'lit,  we  should  provide  0ther  sources  of  supply. 
Mrxic«>  alone  can  furnish  them,  and  she  can  do  so  abun- 
dantly. Her  population  already  amounts  to  9,000,000, 
ln-ini:  -ix  time-  as  lar-v  fcs  that  of  Cuba,  which  is  1,500,- 
ooo;  a  fair  index  to  the  probable  consumption  of  our 
products  by  the  people  of  the  two  countries  under  similar 
conditions  of  trade.  Hitherto  her  industrial  development 
has  been  materially  crippled  by  the  absence  of  cheap 
transportation  for  her  products  from  the  rich  lands  of  the 
interior.  Railroads  are  now  removing  this  obstacle,  and 
11  eir  construction  affords  the  best  opportunity  that  will 


122  TREATY   WITH   HAWAIIAN   ISLANDS. 

ever  arise  for  us  to  open  a  mutually  beneficial  exchange 
of  the  products  of  the  industry  of  our  people  for  many 
articles  now  of  prime  necessity,  and  which  we  cannot  ad- 
vantageously raise  in  our  own  country,  but  are  abundantly 
produced  in  Mexico. 

Under  a  good  commercial  treaty  or  customs  union  with 
Mexico,  many  years  would  not  elapse  before  her  territory 
would  be  intersected  with  a  network  of  railways  carry- 
ing prosperity  into  every  part,  .the  amount  of  our  produc- 
tions taken  in  exchange  for  hers  would  far  exceed  the 
enormous  sum  now  paid  annually  to  Cuba,  and  the  diffi- 
culties arising  from  the  Zona  Libre  or  Free  Belt,  on  our 
frontier  would  immediately  be  settled;  while  the  more 
remote  political  results  which  would  arise  from  the  in- 
creased intercourse  of  the  people  of  both  countries, 
through  the  development  of  their  natural  commercial 
union,  must  be  obvious  to  all  thinking  men. 

It  should  also  be  remembered  that  by  the  adoption  of 
an  American  commercial  system  we  should  not  only  su- 
persede the  demand  upon  us  for  the  specie  or  bills  of 
exchange  now  paid  for  tropical  productions,  but  become 
also  the  intermediate  carriers  and  factors  for  the  trade 
which  would  be  indefinitely  extended  between  our  neigh- 
bors in  Canada  on  the  north,  and  those  in  Mexico  on  the 
south.  The  Canadians,  by  their  recent  proposals  for  a 
treaty  of  trade  with  the  United  States,  and  the  Mexicans, 
through  the  liberal  concessions  their  government  has 
made,  providing  for  a  railroad  nearly  seven  hundred 
miles  in  length,  from  the  city  of  Leon  to  connect  with 
the  international  railroad  of  Texas,  and  thus  with  the 
railway  system  of  the  United  States,  prove  their  appre- 
ciation of  the  benefits  to  be  derived  from  enlarged  com- 
mercial intercourse  with  our  citizens,  who,  we  may  be 
sure,  will  not  transact  business  if  it  is  not  to  their  profit. 

Such  a  treaty  with  Spain  as  would  insure  free  admis- 
sion into  Cuba  for  our  flour,  other  provisions,  and  various 
articles  of  manufacture,  would  be  worth  more  than  the 
fee-simple  of  the  island  itself  to  the  farmers  and  manu- 
facturers and  merchants  of  the  United  States ;  and  the 
commerce  created  by  a  similar  arrangement  with  Mexico 
would  benefit  the  manufacturers  of  New  England  and 


TREATY   WITH   HAWAIIAN   ISLANDS.  123 

Pennsylvania  far  more  than  the  conquest  or  purchase  of 
half  the  Mexican  territory. 

By  these  means  each  country  that  became  a  party  to 
the  arrangement  would  l>e  brought  face  to  face  with  the 
actual  interests  naturally  arising  from  its  condition; 
prejudices  founded  on  erroneous  opinions  would  be  de- 
stroyed. Whatever  political  relations  would  really  be 
mutually  advantageous  would  follow  as  the  natural  re- 
sults of  friendly  and  beneficial  intercourse.  The  people 
of  the  United  States  would  be  enabled  by  practical  ex- 
perience to  decide  how  far  peace  and  perfectly  reciprocal 
commerce  with  adjacent  countries  are  preferable  to  ad- 
mitting dissimilar  nations  to  a  share  of  power  in  govern- 
ing us,  and  to  the  ancient  European  system  of  establish- 
ing jurisdiction  over  them.  The  adoption  of  these 
principles  would  be  the  initiation  of  a  favorable  revo- 
lution in  our  commerce.  The  change  in  our  foreign 
relations,  and  the  benefits  arising  from  it,  would  in  every 
part  of  our  country  give  an  impetus  to  the  industry  and 
spirit  of  enterprise  which  abound  among  us,  and  develop 
them  to  the  utmost;  we  should  no  longer  see  the  great 
prizes  of  trade  with  the  countries  adjacent  to  us  fall  into 
the  hands  of  others,  while  the  character  of  our  people 
and  our  unequalled  agricultural,  mining,  manufacturing, 
and  commercial  facilities  give  us  the  means  of  grasping 
and  retail  ling  them. 

The  commercial  relations  of  the  different  countries  of 
tli is  continent  being  founded  not  only  on  the  present  con- 
dit ion  of  their  people,  but  on  their  unalterable  positions 
ami  variations  of  climate,  unlike  those  topics  which  are 
temporarily  brought  forward  for  purposes  of  faction  or 
excitement,  and  are  dropped  forever  when  a  vote  has 
taken  on  them,  will  constantly  recur,  in  various 
'iirces  of  debate,  irritation,  and,  perhaps,  of 
embroilment,  until  they  are  brought  upon  the  natural  level 

of    jMTfert    freedom. 

Regarding  the   proposed   treaty  with   the   Hawaiian 

Islands  as  the  precursor  of  more  extended  and  beneficial 
measures,  I  trust  it  will  receive  the  sanction  of  the  House. 


COMMERCIAL  RELATIONS  WITH  CANADA. 


HOUSE  OF  REPRESENTATIVES,  May  18,  1876. 


AT  this  time  much  embarrassment  and  distress  prevailed  in 
the  commercial  and  manufacturing  cities  of  the  United  States. 
Under  this  pressure  unprecedentedly  large  quantities  of  our  manu- 
factures had  been  exported  to  Canada,  and  her  value  as  a  market 
was  clearly  demonstrated,  but  our  importations  of  wheat  had, 
under  the  existing  duties,  become  merely  nominal.  The  tariff 
of  Canada  was  exceedingly  liberal,  while  ours  was  oppressive. 
The  result  is,  that  we  sell  large  amounts  of  many  articles  to 
Canada,  to  be  carried  over  railroads  and  canals,  and  exported  by  her 
ships,  while  we  divert  her  exports  from  ourselves.  The  highest 
mercantile  and  official  authorities  in  Canada  had  expressed  a  de- 
sire for  a  fair  extension  of  commercial  relations  with  us,  and  its 
advantages  were  fully  appreciated  in  all  the  northern  States.  In 
this  speech  the  extent  of  Canada,  the  character  of  her  people,  and 
her  natural  connections  with  the  United  States,  are  presented  as 
briefly  as  the  subject  permits,  and  discussed  with  reference  to  the 
principle  of  political  economy,  the  facts  of  the  newest  statistics, 
and  many  demands  of  public  policy.  Recognizing  these  facts, 
Mr.  Ward  introduced  a  joint  resolution  for  the  appointment  of 
commissioners  by  the  President  to  ascertain  the  best  terms  on 
which  a  treaty  of  commerce  could  be  negotiated. 

MR.  SPEAKER:  At  the  present  -time,  when  capital 
seeks  investment,  interest  is  reduced  beyond  all  precedent 
in  this  country,  wages  are  lowered,  immigration  decreases, 
the  value  of  our  exports  is  diminished,  and  hundreds  of 
thousands  of  our  people  are  in  search  of  work  by  which 
they  may  earn  a  livelihood,  it  is  the  duty  of  wise  states- 
men and  sound  patriots  to  do  the  utmost  in  their  power 
to  promote  the  return  of  prosperity  by  such  measures  as 
will  best  extend  the  sales  of  our  productions,  and  promote 
our  carrying  trade  and  commerce.  Hitherto,  intent  upon 
the  development  of  our  unparalelled  resources,  and  hav- 
ing a  sparse  population,  we  have  paid  too  little  attention 
to  our  external  trade  and  the  encouragement  of  foreign 


COMMERCIAL   RELATIONS   WITH   CANADA.        125 

markets  for  our  products,  especially  for  those  of  our  man- 
ufactories, the  number  of  which  we  have  stimulated  to  an 
-it  far  greater  than  is  commensurate  with  the  demands 
of  our  own  population. 

There  is  no  more  obvious  remedy  for  this  state  of  af- 
fairs at  present,  nor  any  more  sure  and  stable  foundation 
of  our  prosperity  in  all  time  to  come,  than  the  extension 
of  our  commercial  relations  with  the  adjacent  countries 
on  this  continent — on  the  north  with  Canada,  and  on  the 
south  with  Mexico. 

Yet  we  seldom  appreciate  at  their  great  and  practical 
value  the  importance  of  the  vast  regions  north  of  the 
United  States  on  this  continent.  Stretching  from  the 
Atlantic  to  the  Pacific  ocean,  they  contain  an  area  of 
three  millions  and  a  half  of  square  miles ;  more  than  is 
owned  by  the  United  States,  exclusive  of  our  newly  ac- 
quired territory  in  the  far  northwest,  and  not  much  less 
than  the  whole  of  Europe  with  its  family  of  nations.  No 
small  proportion  of  these  Territories  consists  of  barren  and 
inhospitable  regions  in  the  extreme  north;  but,  as  a  recom- 
pense, the  arid  plains  extending  through  Texas,  and  thence 
northward  beyond  the  limits  of  the  United  States,  are 
comparatively  insignificant  as  they  enter  the  British  pos- 
sessions, where  the  Rocky  Mountains,  being  less  elevated, 
and  having  a  narrower  base,  afford  an  easier  passage  to 
the  clouds  from  the  Pacific  Ocean,  bearing  ample  rain 
with  its  fertilizing  influences  into  the  interior  of  the  con- 
tinent. By  the  same  cause  the  climate  is  tempered. 

The  isothermal  line  of  60°  for  summer  rises  on  the 
northwestern  plains  as  high  as  the  sixty-first  parallel,  its 
average  position  in  Europe;  and  a  favorable  comparison 
may  also  be  traced  for  winter  and  the  other  seasons  of 
the  year.  Spring  opens  almost  simultaneously  for  a  dis- 
tance «>f  about  twelve  hundred  miles  on  the  vast  plains 
reaching  northerly  from  St.  Paul.  Along  the  valleys  of 
the  Red,  As^inaboine,  Saskatchewan,  and  Mackenzie 
Rivers,  i'.»r  nx.iv  than  seven  hundred  miles  north  of  the 
limit  of  the  United  States,  wheat  has  been  grown,  yield- 
inir  most  abundant  returns  thus  indicating  a  soil  and 
climate  well  suited  for  the  crops  ordinarily  pnxlueed  in 
the  cooler  parts  of  the  temperate  zone.  Barley,  the 


126        COMMERCIAL   RELATIONS   WITH   CANADA. 

grasses,  and  many  root  crops  grow  twelve  hundred  miles 
north  of  the  same  boundary. 

These  facts  are  significant  proofs  of  the  immense 
capabilities  of  the  agricultural  areas  in  the  interior  of  the 
continent  north  of  the  forty-ninth  parallel.  Westward 
from  these  regions — yet  scarcely  inhabited,  but  of  incal- 
culable value  in  the  future — are  countries  of  yet  milder 
climate  on  the  Pacific  coast,  whose  relations  to  California 
are  already  important.  To  the  eastward  are  the  rapidly 
increasing  settlements,  enjoying  the  rich  lands  and  plea 
jsant  climate  of  Manitoba,  on  the  Red  River  of  the  North, 
a  stream  capable  of  steamboat  navigation  for  four  hun- 
dred miles. 

It  is  asserted  by  those  who  add  personal  knowledge  of 
the  subject  to  scientific  investigation,  that  the  habitable 
but  undeveloped  area  of  the  British  possessions  westerly 
from  Lake  Superior  and  Hudson's  Bay  comprises  suffi- 
cient territory  to  make  twenty-five  States  equal  in  size  to 
Illinois.  Bold  as  this  assertion  is,  it  meets  with  confir- 
mation in  the  isothermal  charts  of  Blodgett,  the  testimony 
of  Richardson,  Simpson,  Mackenzie,  the  maps  published 
by  the  government  of  Canada,  and  recent  explorations. 

North  of  a  line  drawn  from  the  northern  limit  of  Lake 
Superior  to  the  coast  at  the  southern  limit  of  Labrador 
exists  a  vast  region,  possessing  in  its  best  parts  a  climate 
barely  endurable,  and  reaching  into  the  Arctic  regions. 
This  country,  even  more  cold,  desolate,  and  barren  on  the 
Atlantic  coast  than  in  the  interior  latitudes,  becoming 
early  known  to  travellers,  has  too  often  given  character  in 
public  estimation  to  the  whole  north. 

Another  line,  drawn  from  the  northern  limit  of  Minne- 
sota to  that  at  Maine,  would  include  nearly  all  the 
inhabited  portion  of  Canada,  a  country  extending  opposite 
the  Territory  of  Dakota  and  States  of  Minnesota,  Wis- 
consin, Michigan,  Ohio,  Pennsylvania,  New  York,  Ver- 
mont, New  Hampshire,  and  Maine,  and  possessing  a 
climate  identical  with  that  of  our  Northern  States. 

The  "maritime  provinces  "  on  the  Atlantic  coast  include 
New  Brunswick,  Nova  Scotia,  Prince  Edward  Island,  and 
Newfoundland.  Geographically  they  may  be  regarded 
as  a  northeasterly  prolongation  of  the  New  England 


COMMERCIAL   RELATIONS   WITH   CANADA.        127 

•m.  Unitedly  they  include  an  area  of  at  least  eighty- 
six  thousand  square  miles,  and  are  capable  of  supporting 
a  larger  population  than  that  at  present  existing  in  the 
United  States  or  Great  Britain.  They  are  equal  in  ex- 
to  the  united  territory  of  Holland,  Greece,  Belgium, 
Portugal,  and  Switzerland. 

The  natural  interests  of  New  Brunswick  and  the  ad- 
jacent State  of  Maine  are  inseparably  connected.  New 
Brunswick  has  an  area  of  twenty-two  millions  of  acres 
and  a  sea-coast  four  hundred  miles  in  extent,  and  abound- 
ing in  harbors.  It  had  at  the  census  of  1871  a  population 
of  nearly  three  hundred  thousand,  being  nearly  equal  to 
that  of  Nebraska,  Nevada,  Oregon,  and  Colorado.  The 
chief  occupations  of  its  inhabitants  are  connected  with 
ship  -building,  the  fisheries,  and  the  timber  trade.  Judging 
from  authentic  surveys  and  records,  it  is  scarcely  possible 
.  >eak  too  highly  of  its  climate,  soil,  and  capabilities. 
Few  countries  are  so  well  watered  and  wooded.  On  its 
unreclaimed  surface  are  large  stocks  of  timber;  beneath 
arc  coal-fields.  The  rivers,  lakes,  and  sea-coast  abound 
with  tisli. 

Nova  Scotia,  a  long  peninsula,  united  to  the  American 
continent  by  an  isthmus  only  fifteen  miles  wide,  is  two 
hundred  and  eighty  miles  in  length.  The  numerous 
indentations  on  its  coa-t  form  harbors  unsurpassed  in  any 
of  the  world.  Including  Cape  Breton,  it  has  an  area 
of  twelve  millions  of  acres.  Wheat  and  the  usual  cereals 
and  fruits  of  the  Northern  States  flourish  in  many  parts 
of  it.  IN  population  in  1871  was  declared  by  the  census 
to  l,c  nearly  four  hundred  thousand.  Besides  possessing 
productive  fisheries  and  agricultural  resources,  it  is  rich 
in  mineral  wealth,  having  beneath  its  surface  coal,  iron, 
ma!i--ane<e.  gypsum,  and  gold. 

The  province  of  Prince  Edward  Island  is  separated 
from  New  Brunswick  and  Nova  Scotia  by  straits  only 
nine  miles  in  width.  It  is  crescent-shaped,  one  hundred 
and  thirty  mile<  in  length,  and  at  its  broadest  part  is 
thirty-four  miles  wide.  It  is  a  level  region,  of  a  more 
moderat"  temperature  than  that  of  Lower  Canada,  and 

(well  adapted  to  agricultural  purposes. 
The  island  of    Newfoundland  has  a  sea-coast  of   one 


128        COMMERCIAL   RELATIONS   WITH   CANADA. 

thousand  miles  in  extent.  It  has  an  area  of  over  twenty- 
three  millions  of  acres,  of  which  only  a  small  portion  is 
cultivated.  Its  spring  is  late,  its  summer  short,  but  the 
frost  of  winter  is  less  severe  than  in  many  parts  of  our 
own  northern  States  and  Territories.  It  is  only  sixteen 
hundred  and  sixty-five  miles  distant  from  Ireland.  It 
possesses  a  large  trade  with  various  countries,  including 
Spain,  Portugal,  Italy,  the  West  Indies,  and  the  Brazils. 

The  chief  wealth  of  Newfoundland  and  of  the  Labra- 
dor coast  is  to  be  found  in  their  extensive  and  inexhaus- 
tible fisheries,  in  which  the  other  provinces  also  partake. 
The  future  products  of  these,  when  properly  developed 
by  human  ingenuity  and  industry,  defy  calculation.  The 
Gulf  Stream  is  met  near  the  shores  of  Newfoundland  by 
a  current  from  the  polar  basin,  vast  deposits  are  formed 
by  the  meeting  of  the  opposing  waters,  the  great  sub- 
marine islands  known  as  "  The  Banks  "  are  formed,  and 
the  rich  pastures  created  in  Ireland  by  the  warm  and 
humid  influences  of  the  Gulf  Stream  are  compensated  by 
the  "  rich  sea-pastures  of  Newfoundland."  The  fishes  of 
warm  or  tropical  waters,  inferior  in  quality  and  scarcely 
capable  of  preservation,  cannot  form  an  article  of  com- 
merce like  those  produced  in  inexhaustible  quantities  in 
these  cold  and  shallow  seas.  The  abundance  of  these 
marine  resources  is  unequalled  in  any  other  portion  of  the 
globe,  except  where  similar  conditions  exist  in  the  North- 
ern Pacific  ocean. 

The  provinces  of  Ontario  and  Quebec,  known  as  Canada 
before  the  union  with  the  Dominion,  include  an  area  of  more 
than  one  hundred  and  eighty -five  millions  of  acres,  inde- 
pendently of  the  northwestern  regions  yet  scarcely  open 
for  settlement.  Their  territory  is  three  times  as  large  as 
that  of  Great  Britain  and  Ireland,  and  more  than  three 
times  that  of  Prussia.  It  intervenes  between  the  great 
northwest  and  the  maritime  provinces,  and  consists  chiefly 
of  a  vast  projection  into  the  territory  of  the  United 
States,  although  it  possesses  a  coast  of  nearly  one  thou- 
sand miles  on  the  river  and  gulf  of  the  Saint  Lawrence, 
where  fisheries  of  cod,  herring,  mackerel,  and  salmon  are 
carried  on  successfully.  Valuable  fisheries  exist  also  in 
its  lakes.  It  is  rich  in  metallic  ore  and  in  the  resources 


COMMERCIAL   RELATIONS   WITH   CANADA.         129 

of  its  forests.  Large  portions  of  it  are  peculiarly  favor- 
al>le  to  the  growth  of  wheat,  barley,  and  the  other  cereals 
of  the  North. 

Within  thirty-five  years,  or  less  than  the  life-time  of 
nearly  all  who  are  now  hearing  me,  the  population  of 
Ontario  and  Quebec  has  increased  about  five-fold,  or  from 
five  hundred  and  eighty-two  thousand  to  about  three 
millions. 

The  population  of  the  Dominion  of  Canada  and  the 
other  possessions  now  exceeds  four  millions,  being  more 
than  that  of  Arkansas,  California,  Delaware,  Florida, 
Kansas,  Louisiana,  Maine,  Minnesota,  Nebraska,  Nevada, 
and  New  Hampshire,  added  together,  at  the  last  census. 
Many  of  their  inhabitants  are  of  French  extraction,  and 
a  few  German  settlements  exist ;  but  two-thirds  oi'  the 
people  of  the  provinces  owe  their  origin  either  to  the 
United  States  or  to  the  British  islands,  whose  language 
we  speak,  and  who  "  people  the  world  with  men  industri- 
ous and  free."  The  identity  of  language  in  contiguous 
countries  is  a  fair  exponent  of  the  tendency  to  amalga- 
mation. It  generally  implies  great  similarity,  if  not 
identity,  of  religion,  laws,  and  habits,  the  essential  ele- 
ments of  thorough  fusion. 

Apart  from  the  artificial  regulations  by  customs  duties, 
the  exchanges  of  the  products  of  labor  between  the  peo- 
ple of  the  United  States  and  their  neighbors  on  the  north 
would  be  as  intimate  and,  in  proportion  to  the  popula- 
tion, at  least  as  various  and  comprehensive,  as  those  of 
the  States  of  our  Union  with  each  other.  In  fact  the 
commercial  relations  of  our  northern,  northwestern,  and 
rn  States  with  the  Dominion  of  Canada,  if  left 
simply  and  without  obstruction  to  the  practical  test  of 
brin-tits  or  profits  given  and  received  by  the  people  of 
both  countries,  would  be  more  close  and  intimate  than 
those  between  most  parts  of  the  Union.  The  great  lakes, 
which  for  some  thousands  of  miles  politically  separate 
us,  are  themselves  among  the  cheapest  and  most  useful 
means  of  intercommunication  for  the  northwestern  and 
eastern  Stat'-s,  and  with  the  majestic  river  through  which 
their  waters  flow,  have  long  furnished,  by  aid  of  short 
canals,  one  of  the  most  important  channels  of  trade  and 


130        COMMERCIAL   RELATIONS   WITH   CANADA. 

travel,  from  the  interior  to  the  ocean,  and  thence  to  the 
chief  markets  of  the  world. 

Nearly  three- fourths  of  the  people  of  the  Dominion  in- 
habit a  territory  in  latitudes  south  of  our  boundaries  in 
Maine  and  Minnesota.  Across  this  region,  and  especi- 
ally the  peninsula  between  Lakes  Huron  and  Michigan, 
is  the  direct  line  of  communication  between  the  States  of 
Maine,  New  Hampshire,  Massachusetts,  Rhode  Island, 
Connecticut,  and  New  York  on  the  one  side,  and  Michi- 
gan, Wisconsin,  Minnesota,  and  all  our  Territories  west 
of  them  on  the  other. 

Great  as  the  value  of  transit  through  Canada  is  to  our 
people,  similar  freedom  through  our  territory  is  perhaps 
even  more  important  to  the  Canadians.  Excepting  the 
maritime  provinces,  the  whole  of  the  British  North 
American  possessions,  until  they  approach  the  Pacific 
Ocean,  is  dependent  upon  the  railroads,  canals,  rivers,  and 
other  means  of  communication  in  the  United  States  for 
the  shortest  routes  to  the  ocean.  Fortunately,  what  is  in 
this  respect  almost  the  necessity  of  the  Canadians  is  one 
from  which  must  result  the  employment  of  our  people 
and  profit  to  our  forwarders  on  such  a  scale  that  it  will 
confer  conspicuous  national  benefit  upon  us  if  we  do  not 
prevent  the  natural  interests  of  the  people  from  attaining 
due  and  harmonious  development.  More  than  that,  the 
great  natural,  permanent  system  of  exchanges  is  between 
the  North  and  South  ;  their  productions  being  necessa- 
rily distinct,  and  modern  civilization  having  rendered 
them  practically  necessaries  of  life  to  the  people  of  each 
region. 

Regarding  the  subject  from  a  broad  and  national  point 
of  view,  it  is  instructive  to  see  how  great  and  varied  are 
the  advantages  that  would  result  to  all  parts  of  our 
country  from  free  intercourse  with  the  neighboring 
nations.  The  northern  and  southern  parts  of  our  conti- 
nent possess  special  and  distinct  advantages  for  pro- 
ducing commodities  with  which  each  can  purchase  those 
of  other  sections.  The  Northern  States,  for  instance, 
need  fear  no  competition  with  Mexico  or  Cuba  in 
manufactures  or  agriculture.  These  countries  would 
purchase,  in  increased  quantities,  our  manufactures, 


COMMERCIAL   RELATIONS   WITH   CANADA.        131 

cereals,  meats,  and  fish,  while  we  in  return  should  con- 
sume more  of  their  sugar,  coffee,  fruits,  and  other  tropi- 
cal productions.  The  agricultural  productions  of  Cana- 
da .-ire  almost  identical  with  those  of  the  Northern* States, 
but  would  be  exchanged  for  our  own  manufactures,  and 
for  the  products  of  warmer  climates,  in  part  those  of  our 
Southern  States,  and  in  part  of  regions  yet  farther  south, 
whose  products  would  thus  be  brought  through  our  ter- 
ritory, and  afford  employment  and  profit  to  our  people, 
with  advantages  to  all  the  countries  which  would  be  par- 
ties to  the  arrangement.  Our  agriculture,  manufactures, 
and  carrying  trade  would  alike  be  benefited,  and  the 
natural  operation  of  the  laws  of  trade  would  necessarily 
confer  corresponding  benefits  on  those  for  whom  our 
work  would  be  done  and  with  whom  our  exchanges 
would  be  made. 

The  trade  between  the  northern  and  southern  parts  of 
this  continent  must  attain  enormous  proportions.  It  is 
very  desirable  for  our  people  that  it  should  as  soon  as 
po— il>le  be  developed  to  the  utmost.  Its  natural  course 
will  be  through  the  central  or  intermediate  States,  creat- 
ing in  them  commercial  interests  of  a  magnitude  which 
it  la  almost  impossible  now  to  calculate.  The  mutual 
benefits  thus  given  and  received  would  be  perpetually 
diffused,  and  circulate  in  every  vein  and  artery  of  com- 
merce and  manufactures  throughout  the  Union,  and  be 
accompanied  with  the  gratifying  knowledge  that  they 
derived  from  the  prosperity  of  our  neighbors  in 
other  countries. 

A<  the  naturally  interdependent  commercial  relations 
of  th<>  Tinted  States  and  Canada  arise  from  geographical 
and  climatic  causes  which  are  permanent  and  unchange- 
ably and  the  cost  of  labor  and  the  interest  on  capital  in 
both  countries  are,  reckoning  from  a  series  of  years, 
nearly  alike,  they  have  from  the  beginning  of  our  history 
attracted  the  attention  of  our  leading  statesmen  without 
distinction  of  party. 

During  the  Presidency  of  General  Jackson,  Mr.  Van 
ISuren,  when  writing  in  1829  to  Mr.  McLane,  then  our 
Minister  at  the  Court  of  St.  James,  referring  especially 
to  the  North  American  Colonies,  said: 


182        COMMERCIAL   RELATIONS   WITH   CANADA. 

The  policy  of  the  United  States  in  relation  to  their  commer- 
cial intercourse  with  other  nations,  is  founded  on  principles  of 
perfect  equality  and  reciprocity.  By  the  adoption  of  these  prin- 
ciples they  have  endeavored  to  relieve  themselves  from  the  dis- 
cussions, discontents,  and  embarrassments  inseparable  from  the 
imposition  of  burdensome  discriminations.  These  principles  were 
avowed  while  they  were  yet  struggling  for  their  independence, 
are  recorded  in  their  first  treaty,  and  have  been  adhered  to  with 
the  most  scrupulous  fidelity. 

The  exceptional  character  of  our  natural  commercial 
relations  with  Canada  has  also  been  duly  observed  by 
some  of  the  most  eminent  advocates  of  what  is  termed 
"  protective  "  policy.  One  of  the  chief  arguments  in  its 
favor  is  that  against  admitting  the  products  of  "  pauper 
labor  "  to  compete  with  those  of  our  own  citizens.  It 
has  no  force  in  reference  to  a  contiguous  country,  from 
which  people  can  pass  to  the  United  States  in  a  few 
moments  or  at  most  a  few  hours.  The  other  argument 
of  the  same  class  of  theorists  is  derived  from  the  impor- 
tance of  a  "  home  market."  But  a  "  home  market "  is 
the  market  nearest  home,  and  this  is  furnished  by  the  re- 
spective countries  to  each  other  at  every  point  of  their 
coterminous  territory. 

Mr.  Clay,  who  was  called  the  father  of  the  "  protec- 
tive "  system,  duly  appreciated  these  facts,  and  from  his 
standpoint  added  valuable  testimony  to  the  uniformity 
of  opinion  among  American  statesmen  in  his  time,  and 
his  conviction  as  to  the  policy  by  which  he  desired  our 
country  to  be  guided. 

The  Government  of  the  United  States — 
He  said — 

has  always  been  anxious  that  the  trade  between  them  and  the 
British  colonies  should  be  placed  on  a  liberal  and  equitable 
basis.  There  has  not  been  a  moment  since  the  adoption  of  the 
present  Constitution  when  they  have  not  been  willing  to  apply 
to  it  principles  of  fair  reciprocity  and  equal  competition. 

As  time  has  passed  and  the  country  on  both  sides  of 
the  frontier  has  become  more  closely  inhabited,  farms, 
villages,  and  cities  taking  the  place  of  the  primeval  wil- 


COMMERCIAL   RELATIONS   WITH   CANADA.        133 

derness,  the  value  of  the  intercourse  of  the  people  has 
immensely  increased.  When  Mr.  Clay  and  Mr.  Van 
Buren  deemed  it  important  the  population  of  Canada 
was  insignificant.  It  is  now  larger  than  that  of  all  the 
six  New  England  States  added  together. 

The  interests  involved  and  the  benefits  each  country 
can  confer  upon  itself  by  due  emancipation  of  its  indus- 
try are  so  many  and  obvious  that  they  will  continually 
demand  discussion  until  they  are  fully  settled  on  the 
busU  of  perfect  freedom,  and  our  trade  with  Canada  is  as 
unrestricted  as  that  of  our  different  States  among  them- 
selves. It  is  our  duty  to  regard  these  questions  practi- 
cally, avoiding  alike  on  one  side  the  inconsiderate  haste 
which  might  result  from  political  sentimentality,  and  on 
the  other  the  influence  of  the  absurd  and  pernicious 
do<mia  which,  carried  to  its  logical  results,  would  put  an 
end  to  all  trade,  individual  as  well  as  national,  that 
whatever  is  profitable  to  others  must  be  injurious  to  our- 
selves. 

The  modern  increase  of  facilities  of  communication 
by  canals,  railroads,  bridges,  steamboats,  telegraphs,  and 
the  press,  assisting  the  transfer  of  merchandise,  the  travel 
of  passengers,  and  the  free  interchange  of  thoughts  be- 
tween the  United  States  and  the  Dominion,  add  to  the 
policy  enunciated  by  Mr.  Clay  and  Mr.  Van  Buren,  a 
value  we  cannot  estimate  too  highly.  The  commercial 
spirit  and  resolute  enterprise  of  the  Canadians  are  shown 
no  less  by  the  attractions  they  have  presented  to  immi- 
gration, and  the  consequent  increase  of  their  population, 
than  by  the  fact  that  with  a  population  small  in  compar- 
i«>n  with  that  of  many  nations  in  the  Old  World  they 
already  rank  as  the  fourth  power  on  the  globe  in  the 
«  xtcnt  of  their  merchant  shipping,  taking  precedence  in 
ite  extent  and  ^ quality  of  all  countries  except  Great 
Britain,  the  United  States,  and  Germany. 

Tin-  a-jivgateof  the  foreign  trade  of  Canada  in  1872- 
7-">  and  1873-74  was  about  two  hundred  and  seventeen 
mil  lions,  each  year,  being  considerably  more  than  one- 
sixth  <>f  M  the  imports  and  domestic  and  foreign  exports 
oi  the  rnitrd  Stat.-s.  The  aggregate  of  our  foreign  trade 
in  1875  was  $1,219,434,544.  If  it  had  been  as  large  as 


134        COMMERCIAL   RELATIONS    WITH   CANADA. 

that  of  Canada  in  proportion  to  the  population  of  the  two 
countries,  it  would  have  exceeded  $2,400,000,000. 

Notwithstanding  the  adverse  laws  in  both  countries, 
preventing  a  free  exchange  of  the  products  of  the  indus- 
try of  their  people,  thus  depriving  Canada  of  her  natural 
prosperity,  injuring  the  business  of  many  of  our  States, 
and  most  seriously  impeding  the  progress  of  those  parts 
of  our  country  which  are  near  the  Canadian  frontier,  our 
exports  of  articles,  the  growth,  produce,  and  manufacture 
of  the  United  States  to  Canada,  according  to  the  report 
of  the  Treasury  Department,  amounted  in  1873-74  to  no 
less  than  $42,505,914,  being  more  than  twenty  times  as 
large  as  those  to  China,  whence  we  draw  so  large  a  pro- 
portion of  our  imports,  and  larger  than  our  exports  of  a 
similar  character  to  any  country  in  the  world  excepting 
only  Great  Britain,  Germany,  and  France.  Our  exports 
to  Canada  of  goods  of  foreign  origin  in  the  same  year 
amounted  to  $4,589,343,  and  the  total  trade  with  her  to 
at  least  the  vast  sum  of  $85.253,168. 

Taking  the  official  statistics  of  Canada  as  the  test  of 
our  exports  to  the  Dominion,  the  value  of  our  exports 
was  much  larger,  those  entered  for  consumption  there 
having  amounted  to  $54,279,749,  and  our  imports  to 
$35,061,117 — the  aggregate  trade  having  been  $90,524,- 
000. 

In  1874-75  the  aggregate  of  our  domestic  exports  to 
Canada,  as  shown  in  the  Report  on  Commerce  and  Navi- 
gation, including  the  additions  on  page  416,  was  $49,906,- 
285,  and  the  trade  between  the  two  countries  amounted 
altogether  to  $86,256,925. 

An  examination  of  our  exports  to  Canada  shows  that 
her  value  as  an  outlet  for  our  manufactures  has  long  been 
much  underrated.  This  has,  no  doubt,  arisen  in  part 
from  the  fact  that  we  compute  the  amount  of  our  ex- 
ports from  our  own  custom-house  statistics.  These  are 
the  best  sources  we  have  of  information  as  to  our  im- 
ports, on  which  accuracy  is  exacted  because  they  are 
subject  to  duty ;  but  there  is  no  euch  urgency  as  to  our 
exports.  They  pass  from  our  side  of  the  lines  without 
much  attention  from  our  officers.  Modern  political  econ- 
omists and  statisticians  have  observed  the  operation  of 


COMMERCIAL    RELATIONS   WITH   CANADA.        135 

the  same  rule  in  various  countries,  and  regard  it  as  an 
established  axiom  that  "the  amount  of  export  is  always 
less  exactly  registered  than  the  amount  of  import,  because 
with  the  former  duty  is  but  rarely  levied."  This  rule  ap- 
plies with  peculiar  force  to  the  ordinary  data  furnished 
}>v  the  official  reports  of  the  commerce  and  navigation  of 
the  United  States  so  far  as  they  refer  to  Canada. 

In  1874  the  Chief  of  the  Bureau  of  Statistics  asked  the 
attention  of  the  National  Legislature  to  this  subject,  and 
in  1875  he  repeated  his  request.  He  found  it  imprac- 
ticable, if  not  impossible,  to  obtain  full  returns  of  mer- 
chandise exported  to  the  Provinces  of  Ontario  and  Quebec. 
Our  custom-house  returns  on  the  Canadian  border  are 
necessarily  defective,  in  part  for  want  of  legislation  re- 
quiring persons  exporting  merchandise  by  railway-cars  or 
other  land-vehicles,  which  have  long  been  used  in  the 
transportation  of  merchandise  across  the  Canadian  bor- 
<lcr-s  to  file  full  manifests  of  such  merchandise  with  the 
collector  of  the  customs  as  is  required  in  the  case  of  all 
exports  to  foreign  countries  in  vessels.  It  has  been  found 
on  close  investigation  into  the  facts  that  in  both  countries 
the  accounts  of  imports  from  each  into  the  other  are  the 
more  accurate,  because  "  the  customs-officers  of  both  are 
constantly  on  the  alert  to  see  that  no  dutiable  merchan- 
dise crosses  the  border  without  paying  its  prescribed  im- 
post." 

Upon  the  basis  thus  irrefutably  laid  down,  it  is  found 
that  the  value  of  articles  of  domestic  production  exported 
from  the  United  States  to  Canada  in  1874  was  $11,424,- 
566,  ami  in  1875  no  less  than  $15,660,281,  in  addition  to 
the  amounts  shown  by  our  own  official  records.  This 
enormous  amount  of  over  $27,000,000  consisted  chiefly  of 
the  products  of  the  manufacturing  industry  of  our  peo- 
ple, and  I  desire  to  direct  to  it  the  special  attention  of 
those  who  fancy  that  an  extension  of  reciprocal  trade 
with  Canada  would  be  injurious  to  the  manufacturing 
population  of  the  United  States. 

One  of  the  most  efficient  and  beneficial  means  of  pro- 
tecting our  manufactures  would  be  to  encourage  the 
demand  for  them  in  Canada.  Including  the  amounts 
given  in  the  statement  of  the  quantities  and  values  of  our 


136        COMMERCIAL   RELATIONS   WITH   CANADA. 

domestic  exports  in  the  official  records  of  the  Bureau  of 
Statistics,  and  the  additions  corrected  from  the  reports 
furnished  by  the  Canadian  commissioners  of  customs,  our 
exports  last  year,  of  our  own  production,  to  the  Dominion, 
included  books  and  stationery  to  the  value  of  $794,846 ; 
cotton  manufactures,  besides  raw  cotton,  $1,591,844 ; 
musical  instruments,  $639,027 ;  leather  and  its  manufac- 
tures, $789,428;  tobacco  and  its  manufactures,  $1,673,- 
366 ;  refined  sugar  and  molasses,  $1,988,733;  manufac- 
tures of  iron  and  steel,  $6,833,649,  besides  other  manu- 
factures to  the  value  of  many  millions.  Our  imports 
during  the  same  year  from  all  parts  of  the  Dominion  of 
her  staple  productions  of  wheat  and  flour  amounted  only 
in  value  to  $363,317. 

If  we  can  export  our  manufactures  in  such  large  quan- 
tities to  Canada  when  impeded  by  her  present  tariff,  it 
cannot  be  disputed  that  we  should  increase  our  sales  of 
them  if  they  were  admitted  at  lower  rates  of  duty,  and 
yet  more  if  they  were  admitted  free  of  all  duty  what- 
ever. 

The  treaty  of  1854  provided  for  a  reciprocal  trade  be- 
tween the  United  States  and  the  British  North  American 
possessions  in  certain  articles,  consisting  mainly  of  the 
unmanufactured  productions  of  the  farm,  forest,  mines, 
and  fisheries.  It  was  for  several  years  mutually  satisfac- 
tory, but  under  the  pressure  of  debt  and  the  need  of 
increased  revenue  the  Canadians  raised  the  duties  on 
manufactured  goods  to  such  an  extent  as  to  destroy  its 
natural  effects  in  promoting  many  branches  of  the  industry 
of  our  people. 

The  Legislature  of  the  State  of  New  York  passed  con- 
current resolutions  complaining  of  the  tariff  thus  exacted 
by  Canada,  and  demanding  a  revision  of  the  treaty,  but 
expressing  approval  of  the  principle  of  reciprocity  and  a 
desire  for  an  extension  of  its  application.  It  was  seen 
that  unrestricted  trade  between  the  United  States  and 
Canada  must  be  mutually  beneficial  for  the  same  reasons 
as  make  it  desirable  between  New  York  and  Pennsylva- 
nia, or  any  of  the  other  States  in  the  Union. 

The  resolutions  of  the  State  of  New  York  asserted  that 
"  free  commercial  intercourse  between  the  United  States 


COMMERCIAL   RELATIONS   WITH   CANADA.        137 

and  the  British  North  American  possessions,  developing 
the  natural,  geographical,  and  other  advantages  of  each 
for  the  good  of  all,  is  conducive  to  the  present  interests 
of  each,  and  is  the  c-aly  proper  basis  of  our  intercourse 
for  all  time  to  come  ; "  and,  in  pursuance  of  the  request 
of  the  State  of  New  York,  that  its  senators  and  repre- 
sentatives in  Congress  should  take  such  steps  as  would 
regulate  the  commerce  and  navigation  between  the  two 
countries  in  such  manner  as  to  render  the  same  recipro- 
cally beneficial  and  satisfactory,  I  moved  in  the  House  of 
Eepresentatives  that  the  President  of  the  United  States 
should  be  authorized  and  required  to  give  notice  to  the 
British  government  that  the  treaty  of  commerce  then  ex- 
isting, as  to  the  British  North  American  Colonies,  would 
be  terminated  at  the  earliest  date  legally  permitted,  but 
that  the  President  should  be  authorized  to  appoint  three 
commissioners  for  the  revision  of  said  treaty,  and  to  con- 
fer with  other  commissioners  duly  authorized  therefor, 
whenever  it  should  appear  to  be  the  wish  of  the  govern- 
ment of  Great  Britain  to  negotiate  a  new  treaty  between 
the  governments  and  the  people  of  both  countries,  based 
upon  the  true  principles  of  reciprocity,  and  for  the  re- 
moval of  existing  difficulties. 

The  preamble  declared  that  inequality  and  injustice 
existed  in  our  present  intercourse  with  Canada,  subver- 
sive of  the  true  intent  of  the  treaty,  owing  to  the 
legislation  of  Canada,  after  the  treaty  had  been  adop- 
ted, and  that  it  was  desirable  that  friendly  relations 
should  be  entertained  between  the  United  States  and 
the  British  North  American  provinces,  and  that  com- 
mercial intercourse  should  be  hereafter  carried  on  be- 
tween them  upon  principles  reciprocally  beneficial  and 
satisfactory  to  both  parties. 

A  motion  to  lay  the  preamble  and  resolution  on  the 
table  was  rejected  by  a  vote  of  76  to  73.  Thus  the 
House  refused  to  terminate  the  treaty  unconditionally. 
A  notice  simply  to  abrogate  the  treaty  was  voted 
down,  and  the  preamble  which  asserted  that  commer- 
cial intercourse  between  the  United  States  and  the 
British  North  American  provinces  should  be  hereafter 
carried  on  between  them  upon  principles  reciprocally 


138        COMMEECIAL   RELATIONS   WITH   CANADA. 

beneficial  and  satisfactory,  was  adopted;  and  the  reso- 
lution would  also  have  been  carried  if  a  few  members 
who,  together  with  their  constituents,  were  conspicuously 
in  favor  of  and  especially  interested  in  the  utmost 
possible  freedom  of  exchanges  between  the  two  coun- 
tries, had  not  been  induced  to  believe  that  they  would 
obtain  better  terms  by  postponement  to  the  next  ses- 
sion of  Congress.  But  the  postponement  was  only 
adopted  by  a  majority  of  five  out  of  one  hundred  and 
fifty-nine  votes. 

Just  before  the  time  for  reconsideration  arrived  the 
war  feeling  had  attained  increased  intensity,  and  the 
exigencies  and  temper  of  the  occasion  threw  all  com- 
mercial considerations  temporarily  aside. 

Since  that  time  the  Canadian  tariff  has  undergone 
great  and  liberal  changes.  Very  many  of  the  articles 
on  which  we  charge  duties  almost  prohibitory  are  ad- 
mitted free  of  all  duties  into  Canada,  and  her  old 
tariff  of  twenty-five  or  thirty  per  cent,  has  been  re- 
duced to  a  general  rate  of  seventeen  and  a  half  on 
manufactures,  often  much  less,  and  can  no  longer  be  a 
subject  for  complaint  for  injustice  on  our  part  while 
we  charge  forty  or  sixty  per  cent.  We  now  approach 
the  whole  subject  under  new  and  favorable  auspices. 

As  the  exports  of  Canada  consist  chiefly  of  raw 
productions  of  the  farm  and  forest,  for  which  we  ex- 
port little  for  actual  consumption  in  Canada,  the  ad- 
mission of  these  articles  free  of  duty  by  each  country 
into, the  territory  of  the  other  is  not  the  most  just  or 
desirable  form  of  reciprocity.  To  place  our  trade  with 
the  Dominion  on  a  satisfactory  basis,  manufactures 
also  should  be  admitted  free  of  duty  from  each  country 
into  the  other.  But  to  effect  this  it  is  necessary  that 
no  higher  duty  should  be  levied  in  one  country  than 
in  the  other  on  iron,  silk,  wool,  and  the  other  materials 
of  manufactures.  Without  this  the  country  admitting 
them  at  low  duties,  or  without  any,  would  manifestly 
be  able  to  undersell  the  other  if  it  continued  such,  duty 
as  it  might  deem,  necessary  for  its  revenue  or  prudent  for 
the  protection  of  its  ]abor  against  the  competition  of 
countries  under  different  social  and  monetary  conditions. 


COMMERCIAL   RELATIONS   WITH   CANADA.         139 

The  best  arrangement  of  reciprocal  trade  between  the 
two  countries  must  include  more  or  less  the  manufac- 
tured as  well  as  the  raw  productions  of  each,  thus  giving 
mutual  encouragement  to  various  and  differing  industries 
on  both  sides  of  the  line,  and  permitting  labor  in  each  to 
adjust  itself  to  the  most  advantageous  employments. 
The  United  States  have  never  yet  made  decisive  efforts 
to  secure  the  benefits  thus  within  their  grasp. 

If  such  a  system  of  reciprocal  exchanges  could  be 
extended  to  manufactured  productions,  both  countries 
would  assuredly  profit.  The  first  effect  might  seem  detri- 
mental to  special  interests  in  both,  but  a  natural  equi- 
librium would  soon  establish  itself,  producing  conditions 
under  which  capital  and  labor  would  be  applied  to  the 
best  advantage.  It  would  be  found  what  each  country 
can  produce  better  and  more  cheaply  for  the  other  than 
the  latter  can  for  itself,  and  under  such  circumstances 
each  would  obviously  be  the  gainer  by  mutual  exchanges. 
It  is  the  nature  of  trade  that  it  will  not  long  be  con- 
tinued unless  all  the  parties  gain  by  it.  Both  as  pro- 
ducers and  consumers  the  people  of  each  country  would 
profit  by  such  an  economical  adjustment  of  affairs. 

I  As  many  manufactures  in  both  countries  are  made  of 
materials  imported  from  various  parts  of  the  world,  it 
would  manifestly  be  impossible  to  establish  a  completely 
free  system  of  commercial  intercourse  with  Canada,  except 
under  duties  not  only  corresponding  but  also  equitably 
divided  on  the  productions  of  other  countries.  This  is 
the  chief  obstacle  to  any  fair,  mutually  advantageous, 
and  complete  arrangement  of  reciprocity  between  us. 
If,  for  instance,  wearing  apparel,  of  which  we  formerly 
M  laruc  quantities  to  the  Canadians,  were  included  in 
a  list  of  free  exchanges  between  us  and  them,  without 
any  more  fundamental  and  comprehensive  change,  Canada, 
by  admitting  free  of  duty  wool,  or,  if  she  chose,  cloth  and 
the  other  articles  used  in  making  apparel,  could  undersell 
us  so  far  as  to  drive  us  out  of  our  own  markets.  The 
principle  thus  illustrated  is  applicable  to  almost  all  other 
manufactures.  The  materials  for  manufactures  of  wood, 
wool,  and  iron,  are  already  brought  into  Canada  either 
free  of  all  imports  or  under  nominal  duties  for  the  pur- 


140        COMMERCIAL   RELATIONS   WITH   CANADA. 

pose  of  encouraging  cheap  production.  There  is  nothing 
to  prevent  their  being  admitted  wholly  free.  Under 
these  circumstances  the  Canadian  manufacturers  would 
have  an  unjust  advantage  over  those  of  our  own  country 
even  in  our  own  markets.  On  our  side  we  might  reverse 
all  this  by  a  lower  tariff  or  a  system  of  bounties.  But  if 
the  materials  of  manufacture  were  admitted  on  the  same 
terms  into  the  United  States  and  the  Dominion,  and  an 
equitable  distribution  made  of  the  revenues,  the  manu- 
factures of  each  might  safely  and  profitably  be  admitted 
into  the  other.  In  fact,  with  our  larger  capital  and  more 
advanced  manufactories  we  should  have  an  advantage  in 
the  competition  which  would  also  inure  to  the  benefit  of 
the  Canadian  people. 

Manufactures  are  not  the  only  form  of  industry  which 
is  worthy  of  consideration.  The  interests  of  our  mer- 
chants and  forwarders,  as  well  as  the  people  of  Canada, 
are  seriously  injured  by  the  present  obstacles  to  their 
intercourse.  There  is  a  great  difference  between  a  bonded 
system  and  a  system  of  perfect  freedom,  as  to  exports  or 
imports.  The  annoyances,  vexations,  and  delays  necessa- 
rily attached  to  any  bonded  system  are  often  sufiicient 
in  this  day  of  easy  communication  to  turn  away  business 
from  its  natural  and  best  centre.  It  is  also  to  be  remem- 
bered that  hitherto  the  Government  of  the  United  States 
has  not  thought  it  expedient  to  refund  the  duties  on  the 
re-exportation  of  foreign  merchandise  in  less  quantities 
than  the  original  package,  thus  creating  an  obstacle, 
often  amounting  to  prohibition,  to  the  jobbing  and  retail- 
ing of  goods. 

That  the  mere  adoption  of  the  same  rates  of  duties  in 
the  United  States  and  Canada  on  articles  imported  from 
other  countries  would  not  be  politic,  is  evident  on  the 
ground  that  customs-revenue  is  chiefly  collected  in  a  few 
ports,  although  ultimately  paid  by  the  consumers,  often 
in  very  remote  parts  of  the  country. 

All  these  difficulties  might  be  solved  by  adopting  the 
principles  embodied  in  the  Zollverein  or  Prussian  con- 
federacy of  the  German  States,  with  such  modifications 
as  may  be  found  expedient  between  ourselves  and  the 
lians.  By  this  course  both  can  obtain  all  the  com- 


COMMERCIAL   RELATIONS   WITH   CANADA.        141 

mercial  advantages  of  union  without  political  entangle- 
ment, leaving  each  country  free  to  practice  in  its  own 
self-government  such  rules  as  it  believes  to  be  most  in 
accordance  with  the  genius  of  its  people,  and  best  adapted 
to  promote  its  own  interests. 

Previous  to  the  adoption  of  the  Zollverein,  it  had  been 
the  misfortune  of  Germany  to  be  divided  into  a  large 
number  of  independent  states — most  of  them  of  petty 
dimensions  and  small  population — every  one  having  dis- 
tinct custom-houses,  tariff  and  revenue  laws,  often  differ- 
ing very  widely  from  those  of  the  neighbors  surrounding 
it.  Sometimes  one  part  of  a  state  was  separated  from  its 
other  parts,  and  was  as  a  commercial  island  encompassed 
by  states  having  different  laws.  The  condition  was  such 
a-<  would  have  existed  in  New  York  or  any  other  of  our 
States,  if  each  of  the  different  counties  had  been  commer- 
cially divided  from  the  rest,  and  the  inhabitants  of  one 
county  could  not,  without  paying  heavy  imposts,  pass 
into  another  with  a  horse,  ox,  or  load  of  grain,  the  pro- 
duct of  their  own  farms,  or  take  imported  goods  into  any 
of  the  counties  adjoining  their  own,  and  the  difficulty 
continually  increased  on  passing  through  additional 
counties.  Thus  the  inland  trade  of  Germany  was  sub- 
jected to  all  the  restrictions  that  are  usually  laid  on  the 
intercourse  between  distant  and  independent  states. 

The  principle  of  the  Zollverein  or  customs  union  is  that 
there  shall  be  entire  and  unrestricted  freedom  of  imports, 
exports,  and  transit  among  all  the  states  which  are  its 
members.  The  same  duties  are  collected  on  the  outside 
frontier  of  the  states  thus  united.  Within  that  line  all 
trade  is  as  untrammelled  as  within  our  present  Union.  An 
equitable  distribution  of  the  revenue  thus  obtained  is 
made  among  all  the  states  of  the  confederation. 

The  Zollverein  is  comprehensively  defined  to  be  the  as- 
sociation of  a  number  of  states  for  the  establishment  of 
a  common  customs  law  and  customs  line  with  regard  to 
foreign  countries,  and  for  the  suppression  of  both  in  the 
intercourse  of  the  States  within  the  border  line.  There 
would  be  no  impediment  by  discriminating  duties  on  the 
importations  for  Toronto  if  made  via  New  York  or  Bos- 
ton. If  the  merchants  of  Chicago  found  it  to  their  in- 


142         COMMERCIAL   RELATIONS   WITH   CANADA. 

terest  to  purchase  at  Montreal,  they  could  do  so ;  and 
buyers  from  the  new  province  of  Manitoba  might  buy 
and  sell  at  St.  Paul,  Du  Luth,  St.  Louis,  or  New  Orleans, 
as  freely  as  at  Halifax  or  any  other  city  in  the  Dominion. 
The  merchants  of  British  Columbia  would  buy  and  sell 
in  the  markets  of  San  Francisco  as  freely  and  with  as 
little  hinderance  as  in  those  of  their  own  country.  All 
means  of  transit  would  be  entirely  open  to  the  people  of 
both  countries,  and  those  most  conducive  to  the  public 
welfare  would  take  the  trade.  Internal  revenue  laws 
could,  so  far  as  necessary,  be  made  in  conformity  with  the 
principles  of  the  Union.  There  could  be  fair  and  com- 
plete competition  everywhere  within  the  confederation, 
and  full  scope  could  be  given  to  the  development  of  natu- 
ral advantages  wherever  they  would  bring  profit  to  the 
merchant  and  save  needless  labor  of  the  people,  or  yield 
remunerative  employment  to  them. 

The  German  Zollverein  began  in  1818,  considerably 
more  than  half  a  century  ago.  Its  progress  is  a  sufficient 
proof  of  the  excellence  of  the  principles  it  embodies  and 
of  the  mode  by  which  they  are  carried  into  effect.  The 
enlightened  state  of  Prussia  was  the  originator  and  leader 
in  the  movement,  by  forming  a  commercial  union  with  a 
few  minor  states ;  the  whole  population  thus  included 
being  at  first  only  nineteen  millions.  The  experience  of 
the  benefits  thus  created  is  so  satisfactory,  that  the  best 
publicists  of  Europe  believe  that  Prussia  thus  conferred 
upon  the  German  people  advantages  scarcely  inferior  to 
those  she  initiated  by  the  diffusion  of  education  and  in- 
telligence. It  not  only  promoted  the  industry  and  pros- 
perity of  the  allied  states  more  than  any  other  measure 
or  sets  of  measures  that  their  governments  could  have  de- 
vised, but  it  was  found  that  the  increase  of  wealth  and 
population  thus  arising  created  an  additional  demand  for 
foreign  products. 

Whatever  opposition  there  is  to  unembarrassed  inter- 
course with  Canada  proceeds  mainly  from  a  fear  lest  it 
might  revolutionize  our  tariff  or  injure  our  revenue.  It 
is  well  to  remind  the  alarmists  who  raise  this  outcry  that 
such  results  are  no  necessary  consequence  of  a,n  American 
Zollverein.  So  far  as  the  Zollverein  of  Germany  is  a 


COMMERCIAL   RELATIONS   WITH   CANADA.        143 

precedent,  such  apprehensions  are  entirely  groundless. 
As  Pru«ia  was  the  largest  and  most  populous  country 
when  the  Zollverein  was  begun,  her  tariff  was  adopted  ; 
and  owing  to  increased  prosperity  and  the  consequently 
increased  consumption  01  tax-paying  articles,  the  revenue 
of  Prussia  rose  about  thirty  per  cent,  in  the  four  years 
next  following  the  amalgamation  of  the  North  German 
and  South  German  States  into  one  grand  union  on  the 
1st  of  January,  1834. 

In  1865  the  benefits  of  the  German  Zollverein  had  be- 
come so  well  proved  and  appreciated,  that  instead  of  the 
three  original  states  or  duchies  it  included  fourteen,  with 
a  population  of  nearly  thirty-six  millions. 

The  solidity  and  cohesive  power  of  the  Zollverein  were 
decisively  tested  in  the  war  which  began  between  Prussia 
and  Austria  in  1866.  The  governments  of  the  North 
German  States  included  in  the  union  sided  with  Austria, 
and  it  was  feared  that  a  dissolution  of  the  Zollverein 
would  ensue  ;  but,  says  one  of  the  historians  of  the  time, 
the  extraordinary  spectacle  was  presented  that  while  "its 
component  parts  were  waging  open  war  with  each  other, 
its  custom-house  authorities  remained  in  their  functions 
in  the  general  name  and  received  and  divided  the  revenue 
moneys  in  the  general  name,  a  spectacle  which  surprised 
nobody  in  Germany,  but  caused  general  astonishment 
abroad  as  something  quite  incomprehensible.  German 
nationality,  and  the  inner  conserving  power  which  ani- 
mates the  Zollverein  received  hereby  the  most  glorious 
confirmation." 

After  the  war  of  1866,  the  German  States  to  the  south 
of  the  river  Main,  having  preserved  their  independence, 
were  not  under  any  obligation  to  renew  the  Zollverein, 
but  preferred  to  continue  members  of  it.  In  1867  a  new 
Zollvereiu  treaty  was  concluded  between  the  states  of  the 
North  German  Confederation  and  the  North  German 
States,  the  scope  of  which  extended  to  the  whole  of  Ger- 
many except  Austria.  Even  with  Austria  a  liberal  and 
comprehensive  treaty  was  effected  in  1868,  mutually  re- 
(lucinir  duties  on  both  sides  and  abolishing  all  transit 
duties  and  nearly  all  those  on  exports. 


144         COMMERCIAL   RELATIONS   WITH   CANADA. 

A  traveller  who  has  crossed  the  outer  line  is  freed  from  the 
vexations  of  the  douanier  in  every  part  of  Germany,  and  may 
proceed  without  interruption  from  Belgium  to  the  frontier  of 
Russia,  and  from  Tyrol  to  the  Baltic,  a  distance  of  seven  hundred 
or  eight  hundred  miles,  including  a  population  of  seventy  mil- 
lions. 

Until  the  Canadians  are  ready  for  annexation  to  the 
United  States  by  their  own  appreciation  of  republican 
institutions,  no  solution  of  the  commercial  questions  at 
issue  between  us  and  them  can  be  complete  except  by 
means  of  a  customs  union.  I,  for  one,  am  not  desirous  of 
incorporating  in  our  political  union  four  millions  of  peo- 
ple who  desire  a  form  of  government  essentially  distinct 
from  our  own.  But  it  by  no  means  follows  that  we  and 
they  should  not  mutually  develop  in  harmony  our  mate- 
rial interests,  and  regard  them  and  the  character  of  our 
respective  populations  as  a  basis  on  which  such  future 
political  arrangements  may  be  made  as  time  may  prove 
to  be  wise.  The  quality  of  grain  or  lumber  and  the  de- 
sirability of  selling  or  purchasing  manufactures  are  ut- 
terly independent  of  the  political  preferences  of  the 
producers  or  consumers,  and  on  neither  side  can  natural 
prosperity  be  promoted  by  chronic  commercial  jealousy. 

It  is  evident  that  the  policy  I  advocate  would  tend  to 
lessen  the  hostility  of  differently  instituted  governments, 
while  it  would  not  interfere  with  the  political  institu- 
tions of  any,  and  that  a  strong  bias  toward  the  most 
friendly  relations  on  other  points  must  naturally  arise 
upon  the  basis  of  mutual  pecuniary  interests  and  intimate 
social,  intercourse. 

Meeting  upon  their  own  ground  the  theorists  who  re- 
gard "  a  balance  of  trade  in  our  favor  "  as  the  chief  test 
of  the  benefits  of  commercial  exchanges  with  any  single 
country,  I  find  that,  according  to  the  reports  of  the  Sec- 
retary of  the  Treasury,  there  appears  to  have  been  during 
the  thirteen  years  when  a  treaty  for  the  reciprocal  ex- 
change of  grain,  lumber,  and  many  other  natural  produc- 
tions existed,  a  balance  in  our  favor  amounting  to  some 
$83,000,000,  and  that  ever  since  the  termination  of  the 
treaty  until  1874;  when -the  pressure  on  our  affairs  tended 
to  force  sales  at  low  prices,  there  has  been  a  balance 


COMMERCIAL   RELATIONS   WITH   CANADA.         145 

against  the  United  States  in  the  trade  with  the  Dominion. 
So  much  for  the  present  exclusive  policy  in  comparison 
with  the  more  liberal  but  incomplete  system  under  the 
treaty,  judging  them  from  the  ordinary  stand-point  of 
many  protectionists. 

Since  the  termination  of  the  treaty  the  proportion  of 
the  trade  of  Canada  with  this  country  in  comparison  with 
the  whole  foreign  trade  has  been  reduced  from  fifty-five 
to  thirty-five  per  cent.,  until  the  necessities  of  our  people 
compelled  them  to  part  with  the  products  of  their  labor 
at  reduced  prices. 

The  tariff  of  Canada  is  moderate  as  compared  with 
our  own ;  yet,  in  connection  with  our  taxation  of  many 
materials,  it  is  enough  to  have  caused  some  important 
branches  of  manufacture,  notably  those  of  wood-sere* ws 
and  musical  instruments,  to  be  lately  transferred  by  our 
own  citizens  to  the  other  side  of  the  northern  frontier, 
where  they  are  not  only  established  for  the  supply  of  the 
people  of  the  Dominion,  but,  if  we  persist  in  our  present 
course,  will  undoubtedly  at  no  distant  date  compete  on, 
terms  favorable  to  the  Canadians  in  neutral  markets  with 
the  products  of  our  own  labor  on  a  very  extensive  scale 
and  in  many  various  manufactures. 

While  it  is  desirable  to  encourage  as  far  as  we  are  able 
the  sales  of  our  manufactures  to  Canada,  it  is  always  to 
be  remembered  that  the  trade  between  that  country  and 
the  United  States  is  to  a  considerable  extent  one  of  tran- 
sit or  carrying  to  other  countries,  and  thus  what  is  called 
"a  balance"  against  us,  which  is  really  an  advantage, 
may  exUt,  because  it  may  merely  represent  what  we  have 
bought  from  one  country  to  sell  at  a  profit  to  others.  If 
our  merchants  buy  the  bulky  productions  of  Canada  to 
the  extent  of  many  millions  and  carry  them  through  our 
own  country  to  our  sea-ports,  they  give  employment  to 
our  laborers,  create  a  demand  for  the  products  of  our  far- 
mers, and  cause  the  expenditure  and  employment  of  vast 
sums  of  money  among  our  traders  and  capitalists,  while 
the  articles  thus  carried  and  exported  stand  to  our  credit 
and  profitably  swell  the  balance  in  our  favor  in  other 
countries,  being  at  least  as  valuable  in  our  exchanges 
with  the  rest  of  the  world  as  if  they  were  gold  or  silver. 
10 


146         COMMERCIAL   RELATIONS   WITH   CANADA. 

The  Canadians,  understanding  the  natural  operation  of 
the  simple  laws  of  business  and  carrying  it  into  their 
affairs  of  state,  have,  with  an  enlightened  self-interest, 
attempted  to  diminish  what  might  by  more  short-sighted 
economists  be  called  "  the  balance  in  their  favor,"  by  ad- 
mitting our  wheat,  flour,  corn,  oats,  barley,  pease,  and 
many  other  productions  entirely  free  of  all  duty.  They 
would  like  the  exchange  to  be  much  more — as  some  of 
our  doctrinaires  would  call  it — "  against  them."  The 
more  of  our  wheat,  corn,  and  flour  they  buy,  or,  in  other 
words,  "  the  larger  the  balance  against  them,"  the  more 
their  shipping  and  canals,  and  with  them  their  merchants 
and  the  rest  of  their  population,  prosper.  We  take  the 
other  course,  and  by  way  of  fancied  "  protection  "  levy  a 
duty  of  twenty  cents  a  bushel  on  their  wheat,  fifteen 
cents  on  their  barley,  ten  cents  on  their  oats,  twenty  per 
cent,  on  their  flour,  and  from  ten  to  twenty  per  cent,  on 
their  pease. 

Under  the  treaty,  the  quantities  of  grain  exchanged 
between  the  two  countries  were  almost  exactly  equal.  In 
1874  our  exports  of  grain  and  bread  stuffs  to  the  Domin- 
ion, exclusive  of  barley,  for  which  we  pay  Canada  a  bet- 
ter price  than  she  can  find  elsewhere,  amounted  to  $16,- 
477,674,  while  the  imports  of  the  corresponding  articles 
were  $3,473,352,  showing  what  is  called  "  a  balance  in 
our  favor"  of  $13,004,322;  our  exports  of  grain  and 
breadstuffs  to  Canada,  as  thus  shown,  being,  in  conse- 
quence of  our  duties  on  her  products  and  her  exemption 
of  ours,  more  than  four  times  as  large  as  our  imports 
from  her.  This  "  balance  in  our  favor "  shows  that 
we  expel  the  trade  in  certain  classes  of  products 
from  our  shipping,  railroads,  elevators,  and  ware- 
houses with  incalculable  injury  to  all  classes  of  our 
people,  and  force  it  into  Canadian  channels.  This  is  more 
fully  shown  by  the  official  reports  of  Canada,  where  it 
appears  that  in  the  same  year  nearly  twenty-one  millions 
of  bushels  of  grain  were  certainly  exported  from  that 
country,  being  between  six  and  seven  millions  of  bushels 
more  than  her  imports. 

Thus  we  see  that  the  purchases  of  grain  by  Canada 
are  for  re-exportation,  either  directly  or  for  such  con- 


COMMERCIAL   RELATIONS   WITH   CANADA.         147 

sumption  as  leaves  a  corresponding  surplus  on  her  own 
side  for  exportation.  No  bonded  system  regarding  grain 
from  Canada  can  afford  such  facilities  for  profits  by  our 
merchants,  millers,  carriers,  and  others  as  would  arise 
from  free  and  untrammelled  trade  in  it 

The  enlargement  of  the  Canadian  canals,  with  a  view 
vet  further  to  draw  away  from  this  country  the  transit  of 
its  own  productions,  and  trade  in  them,  is  at  the  present 
moment  going  on,  and  that  on  a  magnificent  scale.  In 
1855,  the  year  after  the  treaty  went  into  operation,  as 
soon  as  routes  and  markets  of  the  United  States  were 
opened  freely  to  the  grain,  flour,  and  timber  of  Canada, 
the  trade  by  way  of  the  St.  Lawrence  was  $17,469,528, 
or  not  much  more  than  half  its  amount  in  the  previous 
year.  The  decrease  was  $15,203,600,  and  a  correspond- 
ing amount  was  transferred  to  other  carriers,  for  the 
Canadian  trade  in  the  United  States  increased  in  the 
same  time  $15,856,624,  or  from  $24,971,096  to  $40,827,- 
720.  In  view  of  these  facts,  the  urgency  of  removing 
from  those  who  are  employed  on  our  railroads,  rivers, 
and  canals  the  restrictions  imposed  on  them  by  Duties 
on  Canadian  grain,  and  placing  them  on  an  equal  foot- 
ing with  their  foreign  competitors,  cannot  be  reasonably 
disputed. 

If  we  bought  from  Canada  every  bushel  of  wheat  that 
she  now  exports  to  other  countries,  the  demand  in  those 
countries  would  remain  the  same.  The  difference  would 
chiefly  be  that  after  paying  for  it  in  the  products  of  our 
own  labor,  we  should  send  it  or  its  equivalent  to  the 
pn-«»nt  consumers,  and  that  we  should  do  the  business 
ami  make  the  profits  now  made  by  the  Canadians.  If 
thnv  should  be  what  some  call  "a  balance  against  us" 
with  Canada,  it  would  be  more  than  made  up  through 
the  amounts  placed  to  our  credit  by  our  sales  to  other 
countries. 

Mainly,  for  those  agricultural  productions  which  are 
not  u  j  M-rishal  ilc  "  and  will  bear  transportation  the  markets 
of  tin-  world  at  large  regulate  our  own.  The  prices  alike 
<>f  -rain  and  dairy  products  are  transmitted  by  cable  and 
rly  examined  by  the  dealers  in  them  on  this  side  of 
the  Atlantic.  The  free  admission  of  these  articles  into 


148         COMMERCIAL   RELATIONS   WITH   CANADA. 

this  country  will  stimulate  industry  without  reducing 
general  prices,  not  only  through  increasing  the  business 
of  our  railroads,  canals,  rivers,  and  sea-ports,  but  by 
furnishing  them  to  consumers  as  nearly  as  possible  to  the 
places  where  they  are  produced,  and  by  passing  them 
through  the  hands  of  the  fewest  intermediate  dealers. 
There  are  also  many  agricultural  products — notably 
animals  and  fresh  meats — which  might  profitably  be  ex- 
changed by  Canada  for  our  manufactures,  thus  furnishing 
an  increased  and  cheaper  supply  of  provisions  to  our 
people,  who,  under  the  system  I  advocate,  would  pay  for 
them  in  the  products  of  their  looms  and  workshops. 

Even  as  to  these  articles  many  errors  are  current.  It 
appears  from  the  tables  published  by  the  Bureau  of 
Statistics  that  last  year  our  imports  described  as  animals 
from  the  British  American  colonies  amounted  to  $1,987,- 
231,  and  those  of  meats,  butter,  cheese,  poultry,  lard,  etc., 
to  $533,886;  a  total  of  $2,521,117.  An  outcry  is  raised 
that  our  farmers  are  oppressed  by  these  inundations  of 
provisions.  But  their  amount  is  little  more  than  equal  to 
our  exports  of  meats  alone  to  Canada.  Their  amount  is 
no  le'ss  than  $2,457,904.  Of  animals,  meats,  butter, 
cheese,  lard,  and  tallow  only  our  exports  to  the  same 
country  were  $4,398,060,  or  about  two  millions  more  than 
our  imports. 

It  would  be  improper  to  pass  without  examination  our 
trade  with  Canada  in  coal,  an  article  which  is  one  of  the 
essential  elements  of  manufacturers,  and  in  the  North 
becoming  daily  more  and  more  one  of  the  prime  neces- 
saries of  human  life.  It  is  found  in  abundance  on  the 
sea-coast  of  Canada,  whence  it  is  advantageously  exported 
to  the  New  England  States  and  New  York.  But  it  is  not 
found  in  the  interior  and  well-settled  parts  of  the 
Dominion.  They  depend  on  our  mines  for  a  supply,  and 
obtain  it,  free  of  all  duties,  principally  from  Pennsylvania, 
Virginia,  and  Ohio.  Anthracite  coal  is  extensively 
imported  into  the  maritime  provinces.  Altogether,  re- 
garding the  subject  from  a  national  point  of  view,  our 
imports  of  coal  last  year  from  Canada  amounted  to 
$697,673,  and  our  exports  to  her  were,  as  shown  by  our 
own  returns  alone,  $2,034,527.  The  imports,  taking  a 


,e 


COMMERCIAL   RELATIONS   WITH   CANADA.       149 


ries  of  years,  are  nearly  stationary;  but  our  exports 
increase  enormously,  and  in  the  last  three  years  were 
$7,272,964,  not  far  from  four  times  as  large  as  in  the 
three  years  from  1863  to  1867.  Under  these  circumstances 
any  imposition  of  duty  on  coal  from  the  Dominion  is 
evidently  unjust,  favorable  only  to  petty  local  interests 
at  the  cost  of  important  communities  and  contrary  to 
the  spirit  in  which  each  part  of  the  Union  should  regard 
all  the  others. 

Among  our  largest  imports  from  Canada,  tfenber  is 
probably  on  the  whole  the  one  most  necessary  to  our  citi- 
zens. It  forms  a  part  of  every  house  in  city  or  country. 
It  is  directly  or  indirectly  a  part  of  almost  every  manu- 
facture, and  the  cost  of  the  home  of  every  workman  in 
the  manufacturing  parts  of  our  country  depends  upon  its 
price.  Considered  with  regard  to  the  tariff  and  its  "  pro- 
tective" character,  lumber  is  unlike  any  other  article. 
Our  iron-ore  being  inexhaustible,  the  production  of  that 
metal  may  be  stimulated  to  any  extent.  The  more  there 
is  made  of  it  the  more  can  be  made.  The  same  is  true 
of  iiKinufactures  of  wool  and  cotton,  or  of  those  articles 
themselves.  Looms,  sheep,  and  cotton  plantations  can  be 
almost  indefinitely  multiplied.  But,  for  all  intents  and 
purposes,  a  high  price  for  lumber  is  not  only  a  tax  on 
the  people,  but  stimulates  present  production  with  the 
a! »>olute  certainty  of  speedy,'  spendthrift  exhaustion  of 
the  supply.  By  duties  on  Canadian  lumber  we  simply 
exhaust  our  resources  and  pay  for  drawing  what  we  need 
from  places  ivmote  or  difficult  of  access  when  we  might 
gel  it  easier  <-Ke\\ -here.  It  would  be  even  more  reasona- 
ble to  dig  holes  and  fill  them  up  again  than  to  indulge  in 
this  drlu-ive  and  extravagant  legislation. 

There  has  been  a  too  common  belief  that  by  duties  on 
the  productions  of  Canada  we  make  her  people  pay  our 
taxes.  Perhaps  the  fallacy  yet  lingers  in  some  minds. 
The  1a«-t  that  \ve  have  destroyed  our  importations  of 
wheat  and  Hour  from  Canada,  and  that  she  now  sends 
her  -in-plus  together  with  much  of  our  own  to  other  mar- 
ket-.  nay  convince  of  their  error  some  of  those  who  have 
imagined  she  must  depend  upon  us  for  the  sales  of  her 
])r<  xl  uc tions.  It  was  argued  when  the  treaty  was  repealed 


150       COMMERCIAL  RELATIONS   WITH   CANADA. 

and  a  duty  was  imposed  on  Canadian  timber,  that  we 
should  buy  it  as  cheaply  as  ever.  Instead  of  this  con- 
summation, it  has  been  found  that  our  importations  be- 
came nearly  threefold  as  large  as  before,  and  that  the 
prices  in  Canada  doubled,  showing  clearly  that  we  pay 
the  duty  and  injure  every  branch  of  industry  in  which 
northern  timber  is  a  material. 

The  well-known  fact  is  that  we  are  rapidly  exhausting 
our  supplies  of  timber  in  the  Northern  States.  The  de- 
mand for  it  increases  at  the  rate  of  twenty-five  per  cent. 
a  year,  and  even  those  who  are  interested  in  high  prices 
and  immediate  sales  of  what  is  left  of  it,  admit  that  in 
twenty  years  building  timber  will  be  extremely  scarce, 
and  that  in  many  parts  of  the  country,  yet  supplied  in 
part  from  their  own  soil,  it  will  have  entirely  disappeared. 
It  is  stated  on  good  authority  that  more  than  sixty-three 
thousand  nine  hundred  establishments,  employing  nearly 
four  hundred  thousand  persons  and  using  material  to  the 
value  of  $310,000,000  a  year,  were  engaged  in  1869  in 
manufacturing  articles  entirely  from  wood,  in  addition  to 
more  than  seven  millions  four  hundred  thousand  persons 
partly  employed  on  wood  or  using  that  material  yearly 
to  the  value  of  $554,000,000.  In  some  instances,  follow- 
ing the  example  of  more  experienced  nations,  premiums 
are  given  to  those  who  plant  certain  areas  with  forest 
trees.  Yet  in  the  face  of  all  these  facts  we,  under  the 
name  of  "  protection,"  betray  the  public  interests  into 
the  hands  of  a  few  monopolists,  and  condemn  our  people 
to  pay  large  rewards  for  the  too  rapid  destruction  of  our 
remaining  forests.  In  considering  these  facts  it  is  desir- 
able to  remember  that  under  a  free  system  of  exchanges 
Canada  would  be  paid  for  her  lumber  in  the  products  of 
our  labor. 

The  value  of  an  extension  of  trade  with  Canada  is  duly 
appreciated  by  all  thoughtful  -commercial  men.  The 
National  Board  of  Trade  passed  resolutions  and  peti- 
tioned Congress  in  its  favor.  The  New  York  Chamber 
of  Commerce  regards  it  as  "  specially  desirable,  on  polit- 
ical as  well  as  economical  grounds,  that  all  unnecessary 
hinderances  should  be  removed  from  the  commercial  inter- 
course between  the  United  States  and  the  great  Dominion 


COMMERCIAL   RELATIONS   WITH   CANADA.         151 

which  borders  our  northern  border  for  so  many  thousands 
of  miles,"  and  "  strongly  recommends  the  proper  author- 
ities at  Washington  to  enter  into  such  treaty  stipulations 
whenever  the  Canadian  authorities  may  be  found  ready  to 
them  on  a  basis  of  perfect  fairness  and  equity." 
The  boards  of  trade  in  Boston  and  Chicago,  and  many 
other  similar  associations,  have  earnestly  expressed  the 
same  views.  Various  State  legislatures,  notably  that  of 
New  York,  have  passed  resolutions  to  the  same  effect. 
Proof  that  the  importance  of  the  interests  involved  is 
fully  appreciated,  and  of  a  willingness  to  negotiate, 
abounds  in  Canada. 

In  1873  the  Dominion  Board  of  Trade  presented  a 
memorial  to  Earl  Dufferin,  the  governor-general  of  the 
Dominion,  expressing  a  "  sincere  and  cordial  desire  "  that 
he  would  "  be  pleased  to  make  such  representations  to  the 
imperial  government  as  will  procure  the  appointment  of 
a  commission  to  meet  and  confer  with  a  similar  commis- 
sion on  the  part  of  the  Government  of  the  United  States, 
( if  such  commission  has  been  or  shall  be  appointed,)  for 
the  purpose  of  framing  and  negotiating  such  a  treaty  of 
reciprocal  trade  as  will  be  for  the  mutual  advantage  and 
benefit  of  the  trade  and  commerce  of  the  Dominion  of 
Canada  and  the  United  States."  The  Canadian  minister 
of  customs,  the  privy  council,  and  the  governor-general 
fully  concurred  in  these  views,  and  the  governor,  in  coun- 
cil, formally  promised  that  u  should  the  Government  of 
the  United  States  comply  with  the  wishes  expressed  by 
the  National  Board  of  Trade,  the  subject  will  receive 
the  fullest  consideration  of  the  government  of  Canada." 
There  is  good  reason  for  believing  that  no  change  has  been 
made  in  their  views. 

During  the  present  year  a  leading  member  of  the  Do- 
minion Board  of  Trade,  at  its  annual  meeting,  expressed 
the  general  sentiment  of  those  who  were  present  by  say- 
iiu.  aWe  are  anxious  to  deal  fairly  and  liberally  with 
our  neighbors,  and  on  condition  that  they  meet  us  in  a 
liberal  spirit."  A  resolution  was  passed,  declaring  "That 
this  hoard  is  of  opinion  that  it  is  very  desirable  that  a 
treaty  of  reciprocity  in  trade  with  the  United  States,  on 
a  comprehensive,  liberal,  and  fair  basis,  should  be  ob- 


152         COMMERCIAL   RELATIONS  WITH   CANADA. 

tained;  and  is  also  of  opinion  that  the  initiatory  steps 
thereto  ought  to  come  from  the  Government  of  the  Uni- 
ted States,  seeing  that  it  was  by  their  action  that  the  old 
treaty  was  abrogated."  Thus  there  is  ample  proof  that 
commissioners  would  be  promptly  appointed  to  meet  and 
confer  with  our  own. 

While  we  have  now  in  Canada  a  most  valuable  and  in- 
creasing market  for  our  manufactures,  it  is  quite  certain 
that  its  continuance  depends  on  the  duties  levied  by  the 
Canadian  tariff.  A  large  proportion  of  the  manufactures 
we  export  so  extensively  to  the  Dominion,  conspicuously 
those  of  iron,  copper,  brass,  lead,  cotton,  etc.,  are  admitted 
free  of  duty  or  at  almost  nominal  rates  of  five  or  ten  per 
cent.,  and  those  charged  at  higher  rates  than  seventeen  and 
a  half  per  cent,  are  few  in  number  and  insignificant  in 
quantity.  The  Canadians  have  it  in  their  power,  and  it 
could  be  no  just  cause  of  complaint  by  us,  to  adopt  our 
own  scale  of  duties.  The  effect  of  such  a  step  could  not 
fail  to  inflict  serious  injury  on  our  manufacturers,  many 
of  whose  products  would  soon  be  excluded  from  the  Ca- 
nadian markets,  which  it  is  for  our  interest  to  open  yet 
more  widely. 

The  importance  of  our  present  and  future  commercial 
relations  with  the  Hawaiian  Islands  has  been  ably  dis- 
cussed. I  have  not  under-estimated  nor  will  I  now  depre- 
ciate it.  But  it  shrinks  into  seeming  insignificance  in 
comparison  with  the  value  of  the  trade  between  the  peo- 
ple of  the  United  States  and  Canada.  In  the  same  year 
when  our  exports  of  cereal  productions  to  the  Islands 
amounted  to  the  value  of  about  $45,000,  those  to  the  Do- 
minion were  of  the  value  of  over  fourteen  millions,  our 
exports  of  cotton  and  its  manufactures  to  the  Islands  were 
about  816,000,  and  of  iron  and  steel,  including  wooden 
ware,  were  nearly  $20,000,  while  those  of  the  same  classes 
to  Canada  were  over  one  million  one  hundred  thousand 
and  over  six  millions,  respectively,  exclusive  of  wooden- 
ware.  The  exports  I  have  specified  to  'Canada  are  exclu- 
sively of  our  own  production,  the  aggregate  of  which  to 
Canada  was  about  ninety  times  as  large  as  that  of  all  our 
exports  to  the  Hawaiian  Islands  during  the  same  time. 
Without  pursuing  the  comparison  further  it  is  absolutely 


COMMERCIAL   RELATIONS   WITH   CANADA.         153 

unquestionable  that,  if  our  commerce  with  the  Hawaiian, 
slands  is  worthy  of  special  attention,  that  with  the  Do- 
ninion  of  Canada  is  almost  immeasurably  more  so;  and 
he  comparison  loses  nothing  of  its  force  either  commer- 
ially,  politically,  or  in  a  military  point  of  view,  if  we 
onsider  the  limited  area  of  the  Islands  and  the  vast  ter- 
itory  of  the  Dominion  coterminous  with  our  own,  to  be 
nhabited  by  people  sprung  from  ourselves,  or,  like  our- 
selves, from  the  foremost  nations  of  the  Old  World  and 
vhose  number  will  be  computed  by  hundreds  of  millions. 
While   the   moderate   rates   of  duty   exacted   by  the 
Canadian  tariff  enable  us  to  make  large  exports  of  man- 
ifactures,  they  also  permit  goods  from  other  countries  to 
oe  imported  on  the  same  terms.     Silks,  broadcloth,  plate, 
watches,  jewelry,  etc.,  are  charged  with  a  duty  of  only 
seventeen  and  a  half  per  cent.    The  boundary  between  the 
two  countries  not  only  extends  across  the  continent,  but 
the  shore-line  is  increased  for  thousands  of  miles  by  in- 
numerable bays,  affording  great  facilities  for  defrauding 
the  revenue.     At  other  places  a  smuggler  can  go  in  the 
day  or  night  from  one  side  of  the  frontier  to  the  other 
laden  with  jewelry,  laces,  or  other  expensive  goods  liter- 
ally as  easily  and  with  as  much  security  as  a  traveller 
can  pass  from  one  farm  to  another  or  through  the  un- 
broken forest.     It  is  stated  that  stores,  kept  by  enterpris- 
ing merchants,  are  built  on  the  imaginary  or  mathemati- 
cal line  separating  the  two   countries,   and  that  goods 
bought  in  each  are  sold  freely  to  all  customers ;  the  mer- 
chuiidisc  itself  changing  places  from  the  shelves  on  one 

I  side  to  those  on  the  othenf  at  those  hours  and  opportuni- 
ties when  it  is  impossible  for  a  custom-house  officer,  how- 
ever vigilant,  to  watch  what  may  be  done  inside  the 
building.  No  wonder  then  that  the  Secretary  of  the 
Treasury  should  have  found  "the  difficulty  attending  a 
pn.jM-r  surveillance  of  our  northern  frontier"  of  suffi- 
cient importance  as  to  direct  special  attention  to  it  in  his 
last  ivjx.rt  as  bring  "under  existing  circumstances  very 
great,  if  not  in  some  respects  insurmountable."  To 
ru.-inl  these  lines  witli  moderate  security  an  enormous 
icrease  of  the  revenue  service  would  even  now  be  ab- 
)lutely  indispensable.  In  the  four  collection  districts  of 


154         COMMERCIAL   RELATIONS   WITH   CANADA. 

Vermont,  Champlain,  Oswegatchie,  and  Cape  Vincent, 
having  a  frontier  line  of  more  than  three  hundred  miles, 
after  deducting  for  a  few  officers  employed  in  permanent 
service  at  the  principal  ports  and  minor  stations,  "  there 
remain,"  says  the  Secretary  of  the  Treasury,  "  but  four- 
teen as  a  preventive  force,  or  less  than  one  man  for  every 
twenty-one  miles  of  frontier." 

As  the  frontier  regions  become  more  populous  and 
goods  brought  from  one  country  to  the  other  meet  with 
readier  sales,  these  difficulties  will  be  incalculably  in- 
creased, and  it  will  be  absolutely  impossible  to  prevent 
immense  quantities  of  valuable  goods  from  being  illicitly 
brought  across  the  line  without  payment  of  any  duty. 

In  addition  to  these  suggestive  facts  it  is  to  be  remem- 
bered that  some  of  the  most  liberal  and  advanced  states- 
men in  Great  Britain,  not  content  with  the  present  anom- 
alous relations  of  the  mother-country  and  the  colonies, 
entertain  the  project  of  a  Zollverein  or  customs-union 
between  them.  The  people  of  these  countries  have  as 
undoubted  rights  to  free  trade  with  each  other  as  the 
citizens  of  our  different  States  now  enjoy  among  them- 
selves. 

But,  if  the  difficulties  attending  our  present  tariff  are 
now  "  in  some  respects  insurmountable,"  what  would 
they  become  if  the  same  freedom  of  trade  as  exists 
between  the  States  of  the  Union  were  also  a  matter  of 
fact  between  the  different  parts  of  the  British  Empire  ? 
There  is  no  complete  remedy  but  such  a  customs-union 
as  I  have  suggested  between  the  United  States  and  the 
Dominion. 

In  proposing  the  appointment  of  commissioners  to  con- 
fer with  other  commissioners  duly  authorized  by  the 
government  of  Great  Britain,  or  whenever  it  shall  appear 
to  be  the  wish  of  that  government  to  appoint  such  com- 
missioners, to  investigate  and  ascertain  on  what  basis  a 
treaty  of  reciprocal  trade  for  the  mutual  benefit  of  the 
people  of  the  United  States  and  the  Dominion  of  Canada 
can  be  negotiated,  and  to  report  the  results  of  their 
investigation  to  the  President  of  the  United  States,  there 
is  no  bias  toward  any  special  form,  of  reciprocity.  They 
may  or  may  not  approve  of  such  a  customs-union  as 


COMMERCIAL   RELATIONS   WITH   CANADA.         155 

iii  der  existing  circumstances  seems  to  me  the  best  and 
01  ly  perfect  solution  of  the  embarrassments  attending  the 
p:  esent  commercial  relations  of  the  two  countries,  as  it 
\\  >uld  effect  a  great  savin--  in  the  revenue  service,  abolish 
si  niggling,  give  complete  freedom  of  transit  to  the  people 
o; .  both  sides,  and  by  a  continuous  and  harmonious  de- 
V'  lopment  of  their  resources  encourage  social  intercourse 
a  ,d  prepare  the  way  for  whatever  other  institutions  their 
ii  telligence  and  mutual  good- will  might  hereafter  suggest 
a  id  approve.  But  between  such  an  arrangement  and  the 
p  'esent  condition  of  trade  there  are  many  intermediate 
s  eps.  It  ought  not  to  be  difficult  to  agree  upon  the  basis 

0  :  a  common  tariff  on  all  articles,  such  as  silks,  laces, 
b  *andies,  wines,  jewelry,  etc.,  the  importation  of  which  is 
t  «xed  only  for  revenue,  and  in  regard  to  which  no  irrecon- 
c  lable  differences  of  politico-economical  theory  arise,  or 
t  >   determine   the   terms   of   equitable   division   of   the 
r  jvenue  collected  from  them  in  common.     If  this  only 
^  ere  done,  the  most  extensive  smuggling  from  which  the 
r  3 venue  of  the  United  States  suffers  would  be  stopped, 
and  our  own  public  Treasury  would  be  the  gainer  by 

1  lany  millions.     Some  at  least  of  the  manufactures  and 
M\\  products  of  each  country  could  be  admitted  to  free 
exchange  with  those  of  the  other. 

Beyond  these  considerations,  or  rather  as  their  basis, 
sre  the  plain  and  well-known  facts  that  the  prosperity  of 
c  ur  people  and  our  strength  as  a  nation  depend  upon 
1  heir  unrestricted  exchanges  of  the  products  of  their  labor 
more  than  upon  any  other  material  cause,  and  that  the 
lelative  positions  of  the  United  States  and  the  Dominion 
lender  similar  commercial  relations  no  less  valuable  to 
our  citizens  and  the  Canadians;  that  if  permitted  to 
develop  themselves  harmoniously,  according  to  the  unre- 
.-•trieted  wishes  of  the  people,  the  mutual  interests  of  the 
i  wo  countries  are  even  more  important  than  those  of 
many  of  our  own  States,  and  that  whatever  would  directly 
X  n«  tit  BO  large  a  number  of  them  must  be  profitable  to 
hem  all  and  should  be  desired  by  all. 

Whatever  arrangements  may  be  made  might  properly 
.nclude  various  regulations  necessary  for  the  freedom  and 
convenience  of  our  commercial  and  social  neighborhood 


156         COMMERCIAL   RELATIONS   WITH   CANADA. 

and  intercourse,  such  as  a  uniform  system  of  extradition, 
light-houses,  copyrights,  postage,  patents,  telegraphs, 
weights,  measures,  and  coinage. 

The  principles  I  am  desirous  of  seeing  brought  into 
active  use  are  simply  those  expressed  nearly  a  century 
ago  by  Girard,  Franklin,  Deane,  and  Lee  in  a  treaty  of 
commerce  between  France  and  the  United  States,  in 
which  they,  on  the  part  of  this  country,  agreed  to  avoid 
"  all  those  burdensome  prejudices  which  are  usually 
sources  of  debate,  embarrassment,  and  discontent,"  and 
to  take  -as  the  u  basis  of  their  agreement  the  most  perfect 
equality  and  reciprocity,"  u  founding  the  advantage  of 
commerce  solely  upon  reciprocal  utility  and  the  just  rules 
of  free  intercourse."  Thus  all  petty,  acrimonious  debates 
as  to  whether  one  party  would  make  more  or  less  than 
the  other  would  cease.  All  would  be  merged  in  con- 
siderations of  plain  and  palpable  benefit  as  far  as  it  is 
between  States  and  individuals  in  the  Union. 

It  is  undeniable  that  the  Government  and  people  of 
Canada  are  desirous  of  meeting  in  a  friendly  and  liberal 
spirit  whatever  efforts  we  may  make  toward  extending 
our  trade  with  them.  Thus  apparently  the  means  of 
benefiting  a  large  and  suffering  portion  of  our  population 
are  open  to  us  by  giving  them  employment  through  an 
extended  market  for  their  productions.  How  much  this 
is  needed  may  be  estimated  from  the  statement  of  the 
Secretary  of  the  Treasury  in  his  annual  report,  that  our 
domestic  exports  to  all  countries  decreased  in  value  $70,- 
149,321  last  year.  By  opening  trade  with  Canada,  we 
should  also  furnish  our  people  with  a  more  abundant 
supply  of  the  necessaries  of  life  and  some  of  the  mate- 
rials for  manufactures.  The  purpose  of  the  resolutions 
now  under  consideration  is  simply  to  ascertain,  after  full 
and  careful  investigation  by  intelligent  citizens  of  the 
United  States,  how  far  and  through  what  measures  we 
can  best  bring  into  actual  practice  the  opportunities 
which  are  placed  within  our  reach  by  the  circumstances 
of  the  times  and  by  immutable  nature,  or  rather  by  Pro- 
vidence itself. 


)MMERCIAL    RELATIONS    WITH    CANADA, 

AND  THE 

EXTENSION  OF  MARKETS  FOR  OUR  PRODUCTIONS. 


HOUSE  OP  REPRESENTATIVES,  February  1, 1877. 


The  demands  of  the  electoral  count  and  appropriation  bills 
on  the  time  and  attention  of  the  House  in  the  second  session  of 
e  Forty-fourth  Congress  probably  prevented  the  appointment  of 
mmissioners  on  behalf  of  the  United  States  to  confer  with  com- 
issioners  on  behalf  of  Canada,  to  ascertain  on  what  terms  a 
n  utuullv  beneficial  treaty  of  commerce  between  the  two  countries 
c<  uUl  be  arranged.  The  suggestions  made  by  Mr.  Ward  in  his 
BI  eech  during  the  previous  session  had  been  warmly  approved  by 
tl  e  Nat  ion  ul  Board  of  Trade,  the  Dominion  Board  of  Trade,  and 
u  any  leading  commercial  bodies  in  the  United  States.  The 
liouse  permitted  him  to  present  his  closing  arguments,  in  which 
tl  e  natural  commercial  relations  of  the  United  States  and  Canada 
aie  demonstrated,  the  modern  policy  of  Great  Britain  toward 
h  jr  colonies  is  stated,  the  most  recent  statistics  are  comprehen- 
sively  presented,  the  benefits  of  mutual  international  profit  are 
recognized  and  illustrated,  and  "that  short-sighted  view — the 
n.ost  pernicious  and  perhaps  the  most  common  of  all  political 
e  T«  »rs — that  the  gain  of  one  man  or  nation  must  be  the  loss  of 
another,"  is  refuted. 

Mi:.  Si'i.AKKii:  To  those  who  regard  our  commercial 
relation^  with  Canada  comprehensively  and  in  a  national 
spirit,  without  undue  bias  from  minor  matters  of  merely 
1  >eal  <>r  special  interest,  it  is  sufficient  for  me  to  point 
(lit  the  respective  geographical  positions  of  the  United 
Statrs  mnl  the  Dominion,  and  the  extent  of  the  latter 
i  oimtry.  A  straight  line  drawn  from  the  northern  boun- 
dary of  Maine,  near  the  headwaters  of  the  St.  John's 
Stiver,  to  Detroit,  would  pass  entirely  through  Canadian 
U-rritory.  We  are  enabled  more  clearly  to  estimate  the 
extent  of  this  line,  which  is  small  in  comparison  with  our 


158       COMMERCIAL   RELATIONS   WITH   CANADA. 

northern  frontier,  when  we  see,  as  we  may  on  reference  to 
any  map  of  this  continent,  that  if  continued  for  the  same 
length  onward  from  Detroit  into  the  United  States,  it 
would  reach  a  considerable  distance  southerly  from  the 
place  where  the  Arkansas  River  flows  into  the  Missis- 
sippi, and  that  if  extended  directly  south  from  Detroit  it 
would  reach  nearly  to  Tallahassee  or  the  Gulf  of  Mexico. 
Regarded  from  another  point  of  view,  it  may  be  seen 
that  the  part  of  the  Canadian  territory  south  of  a  line 
drawn  from  the  northern  boundaries  of  Maine  and  Minne- 
sota would  exceed  in  breadth  the  States  of  Ohio,  Indiana, 
Illinois,  and  Iowa,  and  would  be  equal  in  area  not  only 
to  those  States,  but  in  addition  to  large  portions  of  Ne- 
braska, Missouri,  Kentucky,  Kansas,  and  Arkansas.     A 
country  of  these  vast  dimensions,  and  under  alien  com- 
mercial laws,  exists  between  all  the  New  England  States, 
New  York  Pennsylvania,   and   Ohio,  on  one  side;  and 
Michigan,  Wisconsin,  Minnesota,  and  all  the  regions  west 
of  them  on  the  other.     An  equal  area  extended  southerly 
would,  with  the  exception  of  a  few  miles,  separate  by  a 
broad  barrier  all  our  territory  north  and  east  of  any  point 
on  the  northern  shore  of  the  Gulf  of  Mexico  from  all 
those  parts  of  the  Union  which  are  northwest  of  it.    What 
commercial   advantages   would   not   each  State  lose   if 
Georgia,  the  Carolinas,  Virginia,  and  Pennsylvania  were 
thus  widely  separated  from  Mississippi,  Missouri,  and  all 
that  part  of  the  United  States  west  of  them,  and  deprived 
of  full  and  free  commercial  intercourse  with  the  inter- 
vening region  ?    The  country  thus  separating  these  various 
States,  if  commercially  isolated  as  far  as  Canada  now  is, 
would  not  only  cease  to  be  so  vast  a  source  of  permanent 
and  honorable  profit  to  the  other  parts  of  the  Union,  but 
would  itself,  by  its  isolation,  suffer  in  a  greater  propor- 
tion than  the  others.     Such  is  the  mutual   injury  con- 
tinually inflicted-  on  the  people  of  both  countries  by  the 
obstacles  to  the  free  exchange  of  the  products  of  industry 
in  the  United  States  and  Canada.    The  evil  results  would 
be  more  conspicuous  than  those  of  the  imaginary  condi- 
tion I  have  endeavored  to  describe  if  the  benefits  of  un- 
trammelled commercial  intercourse  had  ever  been  enjoyed. 
If  to  that  part  of  Canada  which  alone  I  "have  brought 


COMMERCIAL   RELATIONS   WITH   CANADA.       159 


under  consideration  we  add  the  important  maritime  prov- 
inces of  New  Brunswick  and  Nova  Scotia,  and  Manitoba, 
and  the  immense  territory  of  the  northwest  interior  and 
on  the  Pacific  coast,  the  loss  mutually  sustained  is  seen  to 
be  yet  more  vast  and  to  be  continually  increasing. 

Many  considerations  demonstrate  the  importance  of 
mutually  free  imports,  exports,  and  transit  throughout 
the  United  States  and  Canada.  Not  only  does  our 
warmer  climate  enable  us  to  produce  many  articles  not 
easily  or  profitably  grown  in  Canada,  yet  necessary  for 
the  comfort  of  her  people  and  for  which  she  can  give  us 
valuable  exchanges  needed  in  the  daily  life  of  our  citi- 
zens and  as  material  for  the  manufactures  we  export,  but 
our  rivers,  railroads,  and  canals  are  the  only  direct  means 
she  has  of  communicating  with  southern  regions,  while 
unfettered  transit  through  her  territory  and  the  perpetu- 
ally free  navigation  of  tlie  St.  Lawrence  are  conspicuous 
wants  of  the  Western  and  Eastern  States.  The  people 
of  Canada  sprung  from  the  same  nations  of  Western  Eu- 
rope as  those  whence  we  derive  our  origin,  have  all  the 
charteristics  of  a  commercial,  enterprising,  and  progres- 
sive nation,  however  its  manifestations  may  have  been 
n-tarded  by  isolation  from  the  remainder  of  the  conti- 
nent, and,  favored  by  the  resources  of  a  new  and  broad 
territory,  their  products  and  exports  are  of  greater  value 
tli a n  those  of  a  population  of  equal  number,  but  of  any 
other  race  in  the  world.  Already,  though  with  inhabi- 
tants numbering  less  than  one-twentieth  part  of  those  of 
liu-sia,  Canada,  yet  a  colony  or  possession  of  Great  Brit- 
ain, occupies  the  fourth  if  not  the  third  rank  among  the 
nations  of  the  world  in  the  magnitude  of  her  commercial 
marine.  In  the  general  education  of  the  people,  modern 
Canada  is  unsurpassed.  Separated  as  they  are  by  the 
Atlantic  and  Pacific  Oceans  from  the  nations  of  the  Old 
World,  and  enjoying  the  yet  slightly  developed  advanta- 
ges of  their  country,  their  rates  of  the  wages  of  labor 
are  on  the  whole  not  widely  different  from  our  own. 
Fmm  the  greater  part  of  the  Canadian  settlements,  and 
at  an  average  cost  not  far  if  at  all  exceeding  that  of  the 
-  "f  an  artisan  for  a  single  day,  a  man  may  come  to 
the  United  States  where  he  can  earn  such  wages  as  are 


160       COMMERCIAL   RELATIONS   WITH   CANADA. 

paid  here  and  enjoy  the  advantages  of  republican  insti- 
tutions. In  addition  to  these  considerations,  Canada  is 
on  the  whole  a  forest  and  farming  country,  ready  not 
only  to  sell  us  many  of  the  bulky  articles  we  need  for 
common  use  or  for  exportation,  but  also  to  receive  in  re- 
turn those  manufactures  of  which  under  the  policy  we 
have  adopted  we  have  a  large  surplus,  and  for  which  we 
have  not  yet  found  sufficient  markets. 

It  has  followed  as  a  matter  of  course,  from  the  relative 
positions  of  the  United  States  and  Canada,  and  the  dis- 
tance of  both  from  Europe  and  Asia  with  their  dense 
populations,  that  their  commercial  relations  have  engaged 
the  attention  of  the  most  sagacious  statesmen  and  mer- 
chants of  our  country  from  the  beginning  of  its  history 
to  the  present  time ;  and  the  advocates  of  the  most  liberal 
and  intimate  system  of  exchanges  with  the  Canadians 
have  been  confined  to  no  party,  but  have  included  in  their 
number  protectionists  as  well  as  free-traders.  The  ad- 
vantages which,  under  a  system  of  just  and  fair  recipro- 
city, our  own  citizens  and  the  people  of  the  Dominion 
would  mutually  give  and  receive  are  at  least,  in  propor- 
tion to  their  respective  populations,  as  valuable  as  those 
which  any  States  or  groups  of  States  confer  upon  each 
other  by  the  unlimited  freedom  of  trade  between  them, 
and  these  benefits  are  among  the  greatest  derived  from 
the  Union,  and  are  the  strongest  bond  for  its  preservation 
and  perpetuity.  The  barriers  to  intercourse  between  our 
citizens  and  the  Canadians  are  wholly  artificial,  the  results 
of  human  law,  and  can  easily  be-  removed  by  mutual 
agreement  and  appropriate  legislation. 

During  the  last  twelve  months  the  chief  mercantile 
bodies  throughout  the  Northern  States  have  passed  reso- 
lutions earnestly  in  favor  of  the  motion  now  before  this 
House  for  the  appointment  of  commissioners  by  the 
United  States  and  on  the  part  of  Canada,  through  Great 
Britain,  to  inquire  and  ascertain  by  mutual  investigation 
and  conference  how  far  it  is  practicable  to  extend  our 
commerce  with  the  Dominion. 

In  the  States  upon  our  northern  frontier  the  advan- 
tages of  an  extension  of  our  trade  with  Canada  are,  with 
perhaps  a  few  local  exceptions,  highly  appreciated  by  all 


>MMERCIAL   RELATIONS   WITH    CANADA.       10 1 

thinking  commercial  men.  A  more  complete  system  of 
the  exchange  of  the  products  of  labor  between  the  two 
countries  is  warmly  desired  by  the  people  of  New  Eng- 
land at  large — a  sufficient  proof  that  it  would  not  injure 
our  manufactures,  but  would  inure  to  their  benefit.  The 
close  contiguity  of  New  England  on  her  northern  and 
eastern  boundaries  to  Canada  gives  her  people  ample  op- 
portunities for  judging  accurately  as  to  the  practical 
effect  of  reciprocal  trade  ;  and  the  intelligence  and  habits 
of  shrewd  and  careful  calculation  prevalent  in  New  Eng- 
land give  assurance  that  her  chief  men  of  business  are 
reliable  authorities  on  this  subject.  Their  views,  as  pre- 
sented by  one  of  the  leading  members  of  the  Boston  Board 
of  Trade,  and  in  substance  applicable  to  nearly  all  the 
Northern  States,  are  unequivocally  that  New  England  is 
greatly  interested  in  the  question  of  reciprocity.  Her 
people  depend  largely  for  their  success  and  subsistence 
upon  being  able  to  manufacture  as  cheaply  as  they  can. 
They  think,  and  none  can  contradict  them,  that  the  prime 
necessities  of  life,  fuel  and  food,  should  be  supplied  to 
their  laboring-men  at  the  lowest  practicable  cost. 

The  citizens  of  New  England,  knowing  that  between 
them  and  the  Canadians  there  are  no  barriers  except 
those  of  an  artificial  nature,  regard  their  neighbors  in  the 
provinces  as  their  natural  or  legitimate  customers.  The 
representatives  of  the  Boston  Board  of  Trade  assert 
that  the  people  of  Massachusetts  are  deeply  impressed, 
as  many  others  are  in  all  parts  of  our  country,  with  the 
fact  that  difficulties  and  depreciation  are  besetting  every 
branch  of  industry.  These  formidable  disasters  are  not 
confined  to  their  great  cities,  but  even  in  the  small  man- 
ufacturing towns  also  are  found  people  seeking  for  work, 
and  the  general  cry  is,  "  It  is  our  trade  relations  that  are 
Avrono;  and  unsound;  what  have  you  to  suggest  to  lift  us 
out  of  this  slough  of  despond  ?  "  The  most  obvious 
remedy  for  all  this  distress  is  to  increase  the  sales  of 
manufactures  to  our  neighbors  and  the  supply  of  raw 
materials  from  them. 

The  chief  commercial  associations  in  the  city  and  State 
of  New  York  substantially  and  emphatically  concur  in 
the  views  presented  by  the  Board  of  Trade.  The  people 
11 


162       COMMERCIAL   RELATIONS   WITH   CANADA. 

of  that  State,  like  those  of  every  other  commercial  and 
manufacturing  part  of  the  Union,  suffer  by  the  exclu- 
sion of  Canadian  products  from  our  markets  and  the  re- 
strictions upon  the  exportation  of  our  manufactured  arti- 
cles of  foreign  origin  to  Canada.  Through  duties  on 
Canadian  grain,  we  cut  off  an  enormous  trade  which 
would  naturally,  and  with  mutual  benefit  to  the  people 
of  both  countries,  pass  through  our  territory,  paying 
freight  to  owners  of  our  railroads  and  canals  and  giving 
work  and  wages  to  vast  multitudes  of  men  now  in  need, 
and  adding  to  the  profits  of  our  shippers  and  merchants, 
besides,  through  increased  employment,  enlarging  the  de- 
mand for  the  agricultural  and  other  products  of  the  re- 
gions through  which  they  pass.  What  in  these  respects 
is  true  of  the  city  and  State  of  New  York  is  also  true  of 
Philadelphia  and  Baltimore  and  the  States  of  Pennsyl- 
vania and  Maryland.  The  latter,  more  remote  from 
Canada,  have  not  so  clearly  perceived  the  advantages  of 
being  enabled,  with  fewer  or  diminished  impediments,  to 
sell  to  her  the  products  of  their  workshops  or  their  im- 
ports from  Europe  and  the  regions  of  the  tropics.  Rail- 
roads, now  giving  such  easy  access  from  Baltimore  and 
Philadelphia  to  the  interior  of  the  continent,  have  placed 
within  their  reach  new  advantages  as  regards  trade  with 
Canada  which  they  do  not  yet  adequately  appreciate,  but 
are  already  of  much  importance,  and  will  continue  to  in- 
crease for  centuries  to  come. 

It  is  not  surprising  that  the  merchants  and  manufac- 
turers of  New  England  estimate  at  its  real  value  an  ex- 
tension of  trade  with  Canada,  a  country  not  only  conti- 
guous to  their  own  for  many  hundreds  of  miles,  but  for 
a  considerable  distance  intervening  between  their  territory 
and  the  ocean,  and  so  near  to  them  that  a  man  may  stand 
with  one  foot  on  each  side  of  the  dividing  line.  Yet  as 
Canada  is  no  mere  eastern  province,  but  extends  across 
the  continent  from  the  Atlantic  to  the  Pacific  Ocean,  and 
the  best  and  most  fertile  parts  of  the  Dominion  are  in 
the  interior,  her  trade  is  no  more  important  to  New  Eng- 
land than  to  any  other  part  of  the  Union.  While  sugar 
or  coffee,  if  sent  by  the  Saint  Lawrence  route  and 
through  Quebec  and  Montreal  to  Toronto,  must  be  carried 


COMMERCIAL   RELATIONS   WITH   CANADA.       163 


more  than  three  times  as  far  as  if  sent  via  New  York, 
and  at  an  enormously  increased  expense,  the  same  causes 
operate  constantly  and  must  ever  continue  to  do  so  with 
regard  to  Baltimore,  Philadelphia,  New  Orleans,  and  all 
other  southern  ports  in  connection  with  Western  Ontario, 
Manitoba,  and  other  inland  regions  of  the  British  posses- 
If  such  a  continental  system  as  I  desire  to  see 


S101IS. 


should  be  established,  no  cities  would  feel  its  stimulating 
influences  in  greater  force  than  St.  Louis  and  Chicago. 
The  latter  perhaps  would  be  its  heart  and  centre. 

I  have  endeavored  to  present  the  facts  in  the  most 
simple  form.  As  the  resolutions  I  offer  in  regard  to 
tlirm  have  been  approved  by  the  various  local  commercial 
bodies  of  the  United  States  to  which  they  have  been 
presented,  from  Chicago  and  Milwaukee  to  Boston,  with- 
out partisan  considerations,  and,  as  far  as  I  know,  without 
any  dissentient  voice,  so  also  were  they  unanimously  re- 
commended at  the  last  meeting  of  the  National  Board  of 
Trade,  an  association  which  attracts  to  its  councils  leading 
merchants  and  manufacturers  from  all  parts  of  the  Union. 
It  includes  alike  among  its  members  free-traders  and 
protectionists.  Several  of  the  latter  took  special  pains 
to  state  in  explicit  terms  and  the  strongest  language  that 
they  were  u  protectionists  from  the  soles  of  their  feet  to 
the  crowns  of  their  heads,"  but  they  all  without  an  ex- 
ception advocated  the  unequivocal  and  entire  adoption  of 
tin-  resolutions  now  before  the  House  in  favor  of  recipro- 
city with  Canada.  The  opportunities  of  gaining  immense 
business  advantages  for  the  people  of  both  countries  are 
too  open  and  manifest  to  be  successfully  or  candidly 
denied  by  any  one  who  in  a  patriotic  and  national  spirit 
lias  made  any  fair  examination  of  the  subject.  It  is 
entiivly  a  matter  of  business,  partly  in  those  details  with 
which  merchants  are  most  conversant,  and  extending  also 
int<»  those  more  extensive  principles  and  arrangements 
which  arc  based  on  the  broadest  and  most  comprehensive 
considerations  of  statesmanship.  The  resolutions  simply 
pro\  Mr  that  a  few  sensible,  practical  men,  the  best  we 
can  select  on  our  side,  shall  meet  others  of  the  same 
character  appointed  on  behalf  of  Canada,  and  ascertain 
how  far  the  mutual  interests  of  the  people  of  both  coun- 


164       COMMERCIAL   RELATIONS   WITH   CANADA. 

tries  can  be  advanced.  It  is  certain  that  if  we  are  true 
to  ourselves  we  can  furnish  citizens  who  will  prove  the 
equals  of  the  representatives  of  the  Canadians  in  knowl- 
edge, skill,  and  sagacity,  and  will  report  to  our  people 
whatever  good  can  be  derived  from  circumstances  so 
favorable.  Their  suggestions  will  be  submitted  to  Con- 
gress and  the  country,  and  will  be  of  no  avail  unless  they 
obtain  the  approval  of  the  national  legislature  and  the 
enactment  of  appropriate  laws.  The  issue  is  not,  as  some 
seem  to  think  it  must  be,  which  side  can  take  the  most 
shrewd  advantage  of  the  other,  but  how  far  the  natural 
and  gratuitous  bounties  offered  by  Providence  to  the 
people  of  both  countries  can  be  best  developed  for  their 
permanent  and  mutual  benefit.  The  resolutions  go  no 
farther  than  this.  They  do  not  aim  at  carrying  into 
effect  any  special  theory.  The  commissioners  intended 
to  be  appointed  would  enter  upon  their  inquiries  and 
consultations  without  any  undue  bias  and  with  the  whole 
field  of  investigation  and  conference  open  to  them. 
TJiere  are  no  commercial  barriers  between  the  two  peoples 
except  those  which  are  created  by  man,  and  can  be  re- 
moved by  mutual  agreement  and  legislation. 

The  question  is,  in  brief,  whether  with  a  coterminous 
country,  inhabited  by  people  almost  identical  with  our- 
selves in  education,  language,  origin,  and  character,  and 
where  wages,  controlled  by  the  necessary  demand  for 
labor  in  a  new  country  with  vast  undeveloped  resources, 
do  not  differ  much  from  those  given  and  received  in  the 
United  States,  we  cannot  profitably  enlarge  the  exchanges 
of  our  products.  The  arguments  of  those  who  oppose 
the  resolutions  are  and  must  be  founded  on  local  and 
petty  interests.  Carried  to  their  logical  conclusions,  they 
would  prove  that  it  would  be  better  for  us  if  an  open  sea 
existed  on  the  north  of  the  United  States  instead  of  a 
fertile  country  with  a  population  scarcely  surpassed  in 
intelligence,  enterprise,  and  industry  by  any  on  the  face 
of  the  globe. 

During  the  last  session  of  Congress,  a  treaty  for  the 
reciprocal  extension  of  trade  between  the  United  States 
and  the  Hawaiian  Islands  was  approved  by  Congress, 
and  it  has  now  become  part  of  the  laws  of  the  land. 


COMMERCIAL   RELATIONS   WITH   CANADA.       165 

Although  its  advantages  were  in  some  degree  local  and 
accrued  primarily  and  chiefly  to  the  benefit  of  the  Pacific 
States,  the  welfare  of  each  State  is  so  essentially  an  in- 
tegral part  of  that  of  the  whole  Union,  the  material  gain 
derived  by  the  people  at  large  from  the  prosperity  of 
each  State  is  so  great  and  manifest,  that  I  gave  the  treaty 
my  warmest  support.  It  provided  for  a  not  unimportant 
extension  of  the  demand  for  our  manufactures. 

Several  military  and  political  considerations  also 
prompted  me  to  advocate  the  measure.  Their  weight 
was  duly  appreciated  by  many  of  an  opposite  political 
party,  who  hold  what  are  called  protectionist  doctrines, 
but  perceived  that  they  did  not  apply  to  the  case  then 
under  discussion.  It  should  be  gratifying  to  every  good 
and  thoughtful  citizen  that,  so  far  as  a  few  small  and  re- 
mote islands  in  the  Pacific  Ocean  are  concerned,  the  in- 
terests of  our  suffering  people  were  not  neglected,  and 
that  such  legislation  was  adopted  as  is  likely  to  create  an 
increased  demand  for  the  productions  of  their  agricultu- 
ral and  manufacturing  labor,  and,  in  the  far-distant  future 
may  confer  naval  and  military  advantages  on  the  United 
States. 

From  every  possible  point  of  view  our  relations  with 
the  Hawaiian  Islands  shrink  into  absolute  insignificance 
when  compared  with  those  between  the  United  States 
and  the  Dominion  of  Canada.  Every  military,  naval, 
and  commercial  reason  for  which  it  is  desirable  that  we 
should  cultivate  intercourse  with  the  far-ofE  islands  of 
the  Pacific  applies  in  a  different  form,  but  with  incalcu- 
lably increased  force,  to  our  connections  with  our  next- 
door  neighbors  on  the  north.  The  Hawaiian  Islands  are 
distant  some  three  thousand  miles  from  that  part  of  our 
country  which  is  nearest  to  them.  Canada  is  so  near  to 
us  that  for  many  thousands  of  miles  her  territory  is 
separated  from  our  own  only  by  an  imaginary  or  mathe- 
matical line,  and  a  man  may  stand  at  Ms  ease  in  each 
country  simultaneously.  This  contiguity  extends,  not  in 
a  straight  line,  but  with  indentations  nearly  doubling  its 
length,  from  one  side  of  the  American  continent  to  the 

Rot  her  at  the  broadest  part  of  our  broad  land.  Where  our 
countries  do  not  thus  touch  each  other  they  are  separated 


166       COMMERCIAL  RELATIONS    WITH   CANADA. 

only  by  lakes  arid  rivers,  which  in  some  respects  furnish 
increased  facilities  for  intercommunication.  At  various 
points  railroads  cross  the  boundary,  thus  binding  the 
people  together,  if  not  with  links  of  steel,  with  bands  of 
iron.  It  would  have  been  unwise  to  overlook  the  benefits 
which  will  accrue  to  us  from  the  treaty  with  islands  "  in 
the  ends  of  the  earth ; "  but  who  can  say  how  much 
greater  folly  and  injustice  we  commit  toward  our  own 
citizens  by  an  illiberal  and  exclusive  policy  toward  the 
millions  whose  homes  are  close  to  our  own  ? 

It  was  argued,  and  I  do  not  disparage  the  force  of  the 
reasoning,  that  if  we  did  not  enter  into  a  friendly  com- 
mercial treaty  with  the  Hawaiian  Islands  they  would 
pass  into  the  hands  of  some  foreign  power,  and  thus  our 
influence  would  be  weakened,  and,  in  case  of  war,  expe- 
ditions against  us  might  be  fitted  out  from  the  Islands. 
Canada  is  under  the  sovereignty  of  that  nation  which, 
by  means  of  her  vast  naval  power,  might,  if  war  arose, 
be  our  most  formidable  antagonist.  The  population  of 
the  Dominion,  already  greater  than  that  of  this  country 
at  the  time  of  the  Revolution,  will  not  only,  as  the  settle- 
ment of  the  vast  northwest  increases,  be  as  large  as  that ' 
of  this  country  now  is,  but  be  computed  by  the  hundreds 
of  millions,  and  be  far  more  nearly  equal  to  our  own  in 
the  future  than  is  now  usually  supposed.  It  should  be 
unnecessary  to  dwell  longer  on  this  part  of  the  subject. 
Regarded  simply  as  a  matter  of  military  policy,  the 
friendship  of  Canada  is  not  only  more  important  to  us 
than  that  of  the  Hawaiian  Islands,  but  of  any  other 
power  whatever  on  either  side  of  the  Atlantic. 

From  the  same  causes  which  render  our  relations  with 
Canada  more  important  than  those  with  the  Hawaiian 
Islands  in  a  military  point  of  view — her  contiguity  to  the 
United  States,  the  extent  of  her  territory,  and  the  char- 
acter of  her  population — the  almost  incomparably  great- 
er value  of  her  trade  to  us  in  the  future  is  alsa  demon- 
strated. The  comparison  of  the  trade  of  the  two  coun- 
tries with  us  at  present  admits  of  an  approximately 
exact  arithmetical  proof.  In  the  last  calendar  year  of 
which  at  the  present  time  we  have  any  authentic  com- 
mercial record,  our  exports  to  the  Hawaiian  Islands 


COMMERCIAL   RELATIONS   WITH   CANADA.       1G7 

amounted  to  $783,561,  while  those  to  the  British  North 
American  Colonies  during  the  fiscal  year  corresponding 
most  nearly  with  that  period  were  nearly  fifty  times  as 
large,  having  been  at  least  $38,296,531.  Our  exports  to 
Canada  included  grain  and  flour  to  the  amount  of  nearly 
twelve  millions  of  dollars ;  of  animals  and  their  products 
the  amount  was  $4,398,060;  of  raw  cotton,  $556,340 ; 
of  coal,  over  two  millions,  and  of  timber,  $541,151.  Our 
manufactures  exported  to  Canada  included  cotton  goods 
to  the  value  of  $673,031 — nearly  as  much  as  all  our  ex- 
ports to  the  Hawaiian  Islands  added  together ;  glass- 
ware,  84  Hi, 708;  manufactures  of  iron  and  steel,  $3,377,- 
913;  and  of  wood,  $1,376,611.  These  are  all  our  own 
manufactures,  exclusive  of  commodities  of  foreign  ori- 
gin. Altogether  the  value  of  our  own  manufactures  ex- 
ported to  the  Dominion,  exclusive  of  coin  and  bullion,  in 
the  fiscal  year  1875,  was,  as  shown  by  our  own  reports, 
$10,197,580.  Doubtless  the  actual  amount  was  much 
larger,  the  accounts  of  exports  being,  probably  in  all 
c  mntries,  less  accurately  kept  than  those  of  imports.  In 
the  fiscal  year  of  1876  the  aggregate  of  the  imports  of 
all  kinds  to  the  Dominion  from  this  country  was  no  less 
than  $44,093,073,  of  which  more  than  half  were  admit- 
ted free  of  all  duty  whatever,  and  the  remainder  at 
duties  which,  compared  with  those  we  exact  on  similar 
productions  from  Canada,  appear  insignificant.  They  far 
•  •. \.-.-ed  those  imported  into  Canada  from  Great  Britain, 
or  any  other  country,  and  yet  the  duties  collected  on  im- 
ports from  Great  Britain  exceed  those  collected  on 
imports  from  the  United  States  by  nearly  one-half. 

In  specifying  the  amounts  of  several  of  our  produc- 
tions and  manufactures  exported  to  Canada,  I  have  ad- 
hered to  our  own  accounts,  but  as  may  be  seen  on  refer- 
ence to  the  report  of  the  Chief  of  the  Bureau  of  Statis- 
tics on  commerce  and  navigation  for  1875,  and  the  report 
on  the  finances  for  1876,  it  is  almost  if  not  quite  impos- 
sible to  obtain  full  and  accurate  statements  of  our  ex- 
ports to  Canada  from  our  own  authorities.  The  chief 
delect  is  that  railroad  cars  and  other  laud  vehicles  pass- 
ing into  adjacent  territory  are  not  required  to  file  lists  or 
manifests  of  lading  similar  to  those  required  from  ves- 


168       COMMERCIAL   RELATIONS   WITH   CANADA. 

sels  clearing  for  foreign  countries.  Hence  our  own  re- 
turns inadequately  and  grossly  misrepresent  the  real 
value  of  our  exports  to  Canada.  As  duties  on  many  of 
these  articles  are  collected  in  Canada,  accounts  of  them 
are  more  strictly  kept  in  that  country,  although  even 
there,  owing  to  smuggling  and  undervaluations,  they 
doubtless  fall  short  of  the  real  amounts.  It  is  shown  by 
the  official  statements  of  the  Commissioner  of  Customs 
of  the  Dominion,  that  the  value  of  articles  produced  in 
this  country  and  exported  to  Canada,  but  omitted  in  the 
returns  of  our  custom-house  officers,  was,  in  1874,  $11,- 
424,566;  in  1875,  $15,596,524;  and  in  1876,  $10,507,563. 
Most  of  these  exports  consisted  of  manufactures  of  cot- 
ton, wool,  iron,  copper,  etc.  How  far  our  own  reports, 
considered  by  themselves,  are  likely  to  mislead,  may  be 
inferred  from  the  fact  that  to  the  amount  of  our  exports 
of  cotton  manufactures  in  the  year  1875,  which  was 
$673,031,  according  to  the  returns  I  have  already  quoted, 
should  be  added  $918,813— making  a  total  of  $1*591,844 ; 
and  to  $3,377,913,  the  value  of  our  manufactures  of  iron 
and  steel  exported  to  Canada,  as  shown  by  our  own  re- 
ports, should  be  added  no  less  than  $3,455,736,  altogether 
$6,833,649  in  this  branch  of  manufactures  alone.  Similar 
proportions  may  be  observed  as  to  other  exports,  but  it  is 
needless  to  multiply  details.  It  would  be  useless  to  argue 
further  with  those  who  do  not  see  that  such  a  market 
for  our  manufactures  should  receive  attention  and  en- 
couragement from  every  true  friend  of  the  people. 

Surely  it  is  needless  to  urge  that,  if  the  Hawaiian 
treaty  was  worthy  of  approval  by  a  triumphant  majority, 
better  opportunities  of  extending  our  commerce  and 
beneficent  influence  nearer  home  and  on  an  enormously 
larger  scale  should  not  be  neglected.  I  regard  it  as  an 
auspicious  omen  that  so  large  and  influential  a  portion  of 
the  party  in  power,  visiting  in  imagination  the  genial 
climes  of  the  Hawaiian  Islands,  should  have  overcome  the 
theories  and  prejudices  through  which  more  important 
subjects  are  mistily  regarded,  and,  so  to  speak,  have  picked 
up  a  shell  "  on  the  shore  of  the  great  ocean  truth."  Re- 
membering some  of  the  advances  made  in  physical  sci- 
ence since  the  great  philosopher  so  modestly  described 


» 


COMMERCIAL   RELATIONS   WITH   CANADA.       KO 


own  merits  and  discoveries,  I  regard  the  Hawaiian 
treaty  as  a  precedent  fraught  with  great  advantages  to 
the  agricultural,  manufacturing,  and  commercial  interests 
of  all  parts  of  our  country.  I  trust  it  will  be  the  means 
of  directing  public  attention  to  practical  and  easy,  be- 
cause mutually  beneficial,  methods  of  adjusting  affairs 
with  our  neighbors,  both  North  and  South.  As  far  as 
an  extension  of  our  trade  with  them  can  be  carried  into 
effect  it  cannot  fail  to  be  profitable  to  all  parties  to  the 
arrangement.  Our  policy  should  be  not  to  tax  our  own 
citizens  to  pay  others  for  entering  into  our  Union  and 
enjoying  its  advantages,  nor  to  incorporate  with  ourselves 
alien  countries  whose  people  are  not  in  harmony  with  the 
spirit  and  requirements  of  our  institutions,  but  simply  to 
extend  our  commercial  relations  with  them.  We  should 
thus  acquire  the  chief  benefits  of  actual  ownership  with- 
out its  disadvantages.  It  is  a  necessary  counterpart  of 
the  Monroe  doctrine,  prohibiting  the  interference  of  the 
Old  World  in  the  internal  affairs  of  this  continent,  that 
we  should  study  to  promote  the  interests  of  the  other 
American  States  and  extend  the  exchange  of  the  respec- 

Itive  products  of  'their  labor  and  our  own. 
How  vast  the  beneficial  commerce  between  the  United 
States  and  the  Dominion  might  by  this  time  have  become 
if,  instead  of  merely  abrogating  the  former  treaty,  we  had 
endeavored  to  improve  it,  or  substitute  for  it  one  of  more 
perfect  reciprocity,  we  can  now  only  conjecture.  Practi- 
cally for  the  time  we  threw  aside  its  lessons.  By  others 
they  were  heeded  and  yielded  abundant  fruit.  During 
the  visit  of  Richard  Cobden  to  this  country  in  1860  his 
attention  was  pointedly  directed  to  the  treaty  then  in 
operation  between  us  and  the  Canadians.  Whatever 
objections  he  entertained  to  such  measures  were  fully 
removed  by  M.  Chevalier,  who  represented  the  interests 
of  France.  The  result  was  the  memorable  arrangement 
between  England  and  France,  which  was  speedily  followed 
by  similar  treaties  between  other  countries,  anid  not  less 
than  fifty  or  sixty  in  number.  It  is  the  custom  with  a 
certain  class  of  theorists  to  represent  that  in  the  negotia- 
tions between  England  and  France  the  former  was  the 
victor  and  the  latter  a  dupe.  In  fact  both  countries 


170       COMMERCIAL   RELATIONS   WITH   CANADA. 

gained  enormous  advantages.  Thence  a  friendship  arose 
between  the  two  nations  which  is  warmer  and  probably 
more  durable  than  has  ever  existed  at  any  other  period 
of  their  history.  Among  the  causes  which  have  con- 
tributed to  the  marvellous  recuperation  of  France  and  the 
welfare  of  her  people  none  has  been  more  powerful  than 
her  commercial  treaty  with  England,  her  largest  and 
most  profitable  customer,  with  whom  her  trade  is  nearly 
twice  as  large  as  with  any  other  country,  and  more  than 
four  times  as  large  as  with  the  United  States. 

The  exports  of  France  to  Great  Britain  and  Ireland  in 
1858  amounted  to  about  thirteen  millions  of  pounds  ster- 
ling, and  in  1875  to  nearly  forty-seven  millions.  The  ex- 
ports from  Great  Britain  and  Ireland  to  France  increased 
during  the  same  time  in  a  smaller  ratio,  or  from  nine  mil- 
lions to  twenty-seven  millions.  Tried  by  the  protectionist 
theory  of  what  is  sometimes  called  "  the  balance  of  trade,'7 
France  has  enormously  the  advantage,  but  only  so  far  as 
her  customers  in  Great  Britain  and  Ireland  are  enabled 
to  buy  cheaper  from  her  than  they  can  buy  elsewhere. 
The  late  Emperor  Napoleon  fell  in  a  manner  likely  to 
drag  down  with  him  any  cause  that  he  had  espoused,  and 
M.  Thiers,  the  chief  statesman  who  succeeded  him,  was 
at  least  as  decidedly  against  the  treaty  as  the  emperor  had 
been  in  its  favor.  But  the  truth  of  its  benefits  had 
grown  plain  and  palpable,  the  interests  it  served  were  too 
numerous  and  powerful  to  be  subverted,  and  M.  Thiers 
was  reluctantly  compelled  to  yield  to  them. 

Notwithstanding  the  obstacles  we  have  so  long  inter- 
posed,our  trade  with  Canada  in  1875  amounted  to  over  $78,- 
000,000.  According  to  the  most  reliable  statistics,  taking 
the  imports  into  each  country  from  the  other  as  they  are 
shown  by  the  records  of  its  own  custom-houses,  the  trade 
between  the  two  countries  in  1874  and  1875  averaged 
more  than  $90,000,000  in  each  year.  Our  exports  to 
Canada  alone  have  for  many  years  been  four  or  five  times 
as  large  as  to  Russia,  and  much  larger  than  those  to  any 
other  country  in  the  world,  except  only  Great  Britain, 
France  and  Germany.  In  the  opinion  of  many  who  are 
best  qualified  to  judge  on  the  subject,  this  vast  aggregate 
of  our  exchanges  with  Canada,  each  representing  a  trans- 


u » 


COMMERCIAL   RELATIONS   WITH   CANADA.       171 

action  mutually  beneficial  to  some  of  the  people  of  both 
countries,  would  soon  be  doubled  if  the  existing  restric- 
tions of  the  custom-houses  on  both  sides  of  the  frontier 
could  be  removed.  Is  this  prospect,  or  are  the  facts  as  we 
now  find  them,  to  be  thrust  aside  as  if  of  no  moment  in 
the  present  depressed  condition  of  our  trade  and  manu- 
factures? Year  after  year  the  plight  of  our  laboring 
men  throughout  the  country,  and  especially  in  the  regions 
dependent  upon  manufactures  and  commerce,  has  grown 
worse  and  worse.  Year  by  year  since  1872  the  attractions 
presented  to  the  laborers  of  Europe  have  sensibly  dimin- 
ished, until,  in  the  last  fiscal  year,  the  immigrants  to  our 
shores  were  less  by  nearly  three  hundred  thousand  than 
they  were  four  years  ago,  the  actual  reduction  within  that 
time  having  been  from  437,750  to  169,986.  These  new- 
comers go,  it  is  to  be  supposed,  to  friends  who  are  ready 
to  receive  them  chiefly  in  those  parts  of  the  country  least 
affected  by  the  prevalent  distress. 

We  are  all  familiar  with  the  accounts  of  unparalleled 
and  increasing  destitution  among  our  own  working  popula- 
tion. Let  not  repetition  dull  our  minds  so  that  we  can- 
not see,  nor  steel  our  hearts  so  that  we  cannot  feel  the 
force  of  facts  so  often  told  and  so  well  authenticated.  In 
some  of  our  largest  cities  the  present  is  the  third  winter 
when  two-thirds  of  the  unskilled  laborers  have  been  una- 
ble to  find  employment.  Multitudes  of  temperate,  indus- 
trious, and  well  trained  mechanics,  and  of  young  women 
with  honorable  independence  of  character  and  sensitive 
about  receiving  charity  in  any  form  or  shape,  have  lost  all 
hope,  and  in  the  depth  of  destitution  and  despair  are  beg- 
ging to  be  saved  from  lingering  death  through  hunger  by 
being  -<-nt  to  places  intended  for  the  reception  of  vagrants 
and  criminals. 

During  the  seventeen  years  through  which  the  party 
yet  remaining  in  power  has  held  the  reins  of  Government, 
there  lias  Keen  a  conspicuous  and  complete  neglect  of  all 
the  chief  means  for  restoring  prosperity  to  our  people. 
The  return  to  specie  payments  has  chiefly,  except  when  it 
has  been  prevented  by  legislation,  been  left  to  the  slow 
pr«>Lr r»-;s  of  natural  laws  of  finance.  Nothing,  if  we  ex- 
cept the  reduction  of  wages  and  the  increased  destitution 


172       COMMERCIAL   RELATIONS   WITH   CANADA. 

of  our  laborers,  has  been  done  to  promote  ship-building 
and  give  us  again  our  former  commercial  eminence  and 
prestige  on  the  ocean.  Except  in  the  minute  and  peculiar 
instance  of  the  Hawaiian  Islands,  nothing  has  been  done 
to  extend  the  markets  for  the  production  of  our  fields 
and  manufactories.  In  view  of  the  present  widespread 
misery  we  who  are  placed  here  to  frame  laws  for  the  ben- 
efit of  the  people  shall  be  worthy  of  the  most  severe  con- 
demnation if  we  neglect  to  give  our  best  attention  to  such 
enactments  as  will  yield  food  and  work  to  the  suffering 
masses.  Among  the  most  obvious  of  these  measures  is 
such  an  extension  of  our  trade  with  Canada  as  will  yield 
us  a  larger  amount  of  grain  and  other  necessaries  of  life, 
increase  the  use  of  our  leading  thoroughfares  in  the 
North,  and  enlarge  the  outlets  already  existing  in  the 
Dominion  for  our  manufactures.  We  see  that  the  oppor- 
tunity is  open  to  us  in  the  relative  geographical  positions 
of  the  two  countries,  and  that  even  under  the  present 
restrictions  the  exchange  of  the  products  of  labor  between 
them  is  enormous.  We  have  also  reliable  assurances  in 
the  settled,  firm  and  stable  character  of  the  Canadian 
government  and  people,  and  their  frequently  expressed 
desire  to  ascertain  by  mutual  conference  with  us  how  far 
our  commercial  relations  can  be  emancipated  and  ex- 
tended. This  desire  has  been  repeatedly  shown  in  the 
newspapers  of  Canada,  the  resolutions  passed  by  her 
boards  of  trade,  and  the  authentic  and  official  statements 
of  her  government  itself. 

The  Dominion  Board  of  Trade  at  every  one  of  its 
meetings  has  expressed  an  earnest  and  intelligent  desire 
for  an  extension  of  trade  with  us,  and  in  every  instance 
has  coupled  the  expression  of  the  desire  with  that  of  a 
belief  that  the  first  official  proposal  for  it  should  come 
from  the  Government  of  the  United  States,  offers  made 
by  Canada  having  been  regarded  with  so  little  attention 
on  this  side  of  the  frontier.  A  leading  representative  of 
Canada,  at  the  meeting  of  our  own  National  Board  of 
Trade  in  New  York  last  summer,  reiterated  these  views, 
and  no  doubt  uttered  the  general  sentiment  of  his  coun- 
trymen when  he  confidently  assured  his  hearers  that  if 
Congress  should  adopt  the  resolutions  now  before  this 


.   COMMERCIAL   RELATIONS   WITH   CANADA.      173 

House  for  the  appointment  of  commissioners,  the  Cana- 
dian Government  would  "  likewise  appoint  a  commission, 
and  we  should  for  the  first  time  since  the  abrogation  of 
the  "old  treaty  have  business  men  to  sit  down  together, 
talk  the  matter  over  fairly  and  squarely  as  a  practical 
question,  deal  with  all  its  difficulties,  and,  if  possible, 
bring  about  a  treaty  which  will  be  mutually  satisfactory 
to  both  countries."  The  Canadian  minister  of  customs, 
the  privy  council,  and  present  governor-general  have  at  dif- 
ferent times  fully  concurred  in  these  views,  the  governor- 
general  himself  in  council  having  formally  promised 
"  that  should  the  Government  of  the  United  States  com- 
ply with  the  wishes  expressed  by  the  National  Board  of 
Trade,  the  subject  will  receive  the  fullest  consideration 
of  the  Government  of  Canada." 

At  the  time  of  the  abrogation  of  the  old  treaty  there 
was  much  just  reason  for  complaint  of  the  illiberality 
and  unfairness  of  the  Canadian  tariff  on  many  of  the 
productions  of  the  United  States ;  but  all  that  has  now 
been  reversed.  We  impose  on  all  kinds  of  Canadian 
grain  and  flour  a  duty  so  heavy  as  to  be  nearly  prohibi- 
tory, with  the  single  exceptions  of  barley  and  some  peas, 
for  the  production  of  which  the  soil  and  climate  of  Can- 
ada and  the  habits  of  her  farmers,  or  all  these  causes 
combined,  are  especially  favorable.  Nearly  all  the  arti- 
cles admitted  into  Canada  free  of  duty  under  the  old 
treaty  are  now  admitted  there  free  of  duty,  while  on  our 
side  they  are  heavily  taxed.  Although  Canada  is  an  in- 
tegral part  of  the  British  Empire,  all  the  manufactures 
of  the  United  States  are  admitted  there  upon  the  same 
terms  as  tlmse  of  any  other  colony  and  of  Great  Britain 
herself.  The  old  colonial  restrictions  have  passed  away, 
and  become  obliterated  by  the  advancing  power  of  a 
more  enlightened  policy. 

The  views  I  advocate  have  sometimes  been  met  by  the  ob- 
jection that,  whatever  might  be  the  mutual  interests  of  the 
United  States  and  Canada,  Great  Britain  would  not  per- 
mit them  to  be  harmoniously  developed.  I  think  there 
U  no  reason  to  apprehend  any  real  difficulty  on  this  score. 
If  the  interests  of  Canada  are  stifled  and  oppressed,  let 
us  be  certain  that  we  are  not  the  wrong-doers,  and  that 


174       COMMERCIAL   RELATIONS   WITH   CANADA.. 

the  blame  is  put  on  the  right  shoulders.  A  brief  review 
of  the  history  of  the  colonies  throws  much  light  on  our 
policy  in  regard  to  them.  For  the  last  half -century  they 
nave  made  steady  and  accelerated  progress  toward  greater 
freedom  and  independence.  The  measures  adopted  by 
Great  Britain  have  undoubtedly  encouraged  the  move- 
ment. 

Soon  after  the  first  American  colonists  from  Great 
Britain  had  surmounted  the  difficulties  and  hardships  of 
the  earliest  settlements,  in  the  regions  which  are  now  the 
United  States,  and  had  begun  to  accumulate  wealth,  the 
exclusive  system  was  applied  so  far  that  few  articles 
could  be  exported  from  the  colonies  to  any  other  country 
without  being  first  laid  upon  the  shores  of  Great  Britain. 
Next,  the  colonists  were  compelled  to  buy  solely  from 
British  merchants,  and  their  importations  could  only  be 
made  in  British  ships,  "  it  being  the  usage  of  other  nations 
to  keep  the  plantation  trade  exclusively  to  themselves." 
Even  the  excellent  Lord  Chatham,  distinguished  as  a 
friend  of  the  colonies,  was  so  far  imbued  with  the  com- 
mon heresies,  of  his  time  as  not  to  hesitate  in  declaring 
that  "  the  British  colonies  in  North  America  had  no  right 
to  manufacture  even  a  nail  for  a  horseshoe ;"  and  Lord 
Sheffield  only  expressed  the  general  opinion  of  his  day 
when  he  affirmed  that  "  the  only  use  of  the  colonies  and 
the  West  India  Islands  is  the  monopoly  of  their  consump- 
tion and  the  carriage  of  their  products."  On  all  these 
points  increased  enlightenment  has  effected  a  quiet  revo- 
lution. The  monopoly  of  the  colonial  trade  was  found  to 
be  as  unprofitable  to  the  oppressor  as  to  the  oppressed, 
and  confirmed  progress  has  been  made  in  those  views  of 
public  policy  which  are  inextricably  blended  with  mag- 
nanimity and  liberality. 

A  few  years  ago  the  Government  of  Canada,  through 
its  financial  minister,  emphatically  declared  the  right  of 
the  people  of  that  country  to  decide  for  themselves,  in 
all  respects,  the  mode  and  extent  to  which  taxation  shall 
be  imposed  on  them.  The  British  Government  was  warned 
that  serious  evils  and  future  complications  would  result 
from  any  opposition  to  the  rights  thus  asserted;  and  the 
Canadian  Government  congratulated  itself  that  the  Brit- 


COMMERCIAL   RELATIONS   WITH   CANADA.       175 

ish  ministry  of  that  day  "have  been  obliged  to  admit 
that  we  were  in  the  right,  and  that  any  assumed  interfer- 
ence with  our  rights  and  privileges  is  not  for  one  moment 
to  he  entertained."  Thus  the  practical  rights  of  self- 
government,  only  obtained  by  the  United  States  through 
revolution,  were  quietly  conceded.  The  most  striking 
point  in  this  illustration  of  the  reversal  of  the  ancient 
relations  of  Great  Britain  and  her  colonies  is  not  merely 
that  so  great  a  concession  was  made  to  the  colonies,  but 
that  the  point  in  dispute  was  an  order  in  council  disallow- 
ing a  bill  inflicting  certain  disabilities  on  the  shipping  of 
the  United  States. 

The  people  of  Great  Britain  have  discovered  that  their 
own  capitalists  and  laborers  were  injured  by  forcing  the 
trade  of  the  colonies  in  artificial  directions  and  with- 
drawing it  from  the  natural  and  really  beneficial  pursuits 
in  which  it  would  have  been  employed.  The  revolution- 
ary war  in  the  United  States  strengthened  these  impres- 
sions. It  was  found  that  the  independence  of  the  United 
States,  and  their  consequent  prosperity,  contributed  ma- 
terially to  the  well-being  of  Great  Britain,  whose  tax- 
payers were  relieved  from  the  expense  and  trouble  of 
governing  distant  and  extensive  regions,  while  the  benefits 
of  intercourse  with  them  not  only  remained  but  were 
augmented.  The  belief  has  become  more  and  more  prev- 
alent in  the  mother-country  that  the  means  by  which  she 
can  most  securely  and  profitably  derive  the  elements  of 
real  prosperity  from  her  colonies  ij  by  permitting  them 
to  direct  their  industry  into  those  channels  which  their 
natural  position  and  advantages  indicate  as  the  most  re- 
munerative. 

On  the  one  hand  concessions  were  made  to  the  colonists 
l>\  permitting  them  to  resort  to  the  markets  of  the  world 
and  tax  British  manufactures;  on  the  other,  the  British 
jx-oplr  were  gradually  emancipated  from  the  oppressive 
taxation  which  gave  the  colonies  special  privileges  in 
Great  Britain  itself.  The  latter  was  at  first  especially 
conspicuous  as  to  the  indispensable  articles  of  grain,  flour, 
and  lumber. 

The  military  and  naval  defense  of  the  colonies  remains 
as  the  only  substantial  relic  of  the  ancient  policy.  The 


176       COMMERCIAL    RELATIONS   WITH   CANADA. 

consideration  given  for  it  is  withdrawn.  It  remains  as  a 
tax  on  the  people  of  Great  Britain  without  affording 
them  any  adequate  compensation,  and  the  declaration  of 
their  leading  statesmen  of  all  parties,  the  actions  of  their 
government,  and  the  tendencies  of  public  opinion  clearly 
indicate  the  early  termination  of  this  anomalous  and  in- 
consistent condition.  The  time  is  approaching  when,  as 
the  most  zealous  defenders  of  the  old  colonial  system  have 
admitted  would  be>  the  case,  it  will  be  found  that  "  it  is 
all  of  a  piece,  and  must  either  stand  or  fall  together." 

So  evidently  correct  are  the  frequent  assertions  of  Can- 
ada that  her  Government,  acting  for  her  legislature  and 
people,  must,  whatever  may  be  the  deference  they  owe  to 
the  imperial  authorities,  decide  for  themselves  as  to  all 
matters  connected  with  the  tariff,  and  so  completely  has 
the  principle  thus  announced  been  carried  out  in  legisla- 
tion, that  Great  Britain,  in  reply,  is  throwing  the  naval 
and  military  defense  of  the  Canadians  upon  themselves. 

A  former  governor-general  of  Canada  substantially 
declared  in  the  Imperial  Parliament  that  if  Canada  should 
ask  for  independence  the  request  would  readily  be  grant- 
ed. If  we  look  among  those  British  statesmen  now  living, 
and  who  for  many  years  have  been  leaders  in  the  actual 
and  progressive  career  of  their  country,  and  whose  influ- 
ence was  never  more  completely  manifested  than  in  the 
recent  change  in  her  European  and  Asiatic  policy,  we  find 
in  their  public  speeches  the  most  creditable  and  liberal 
expressions  regarding^  the  commerce  of  the  United  States 
with  Canada,  and  the  relations  of  .Great  Britain  with  the 
latter.  The  profitable  and  humanizing  effects  of  the  com- 
mercial treaty  with  Great  Britain  and  France  point  out 
significantly  and  decisively  how  valuable  a  judicious  com- 
mercial treaty  between  the  United  States  and  Canada 
would  be,  not  simply  in  increasing  sales,  but  in  promoting 
the  advancement  of  the  soundest  doctrines  of  civilization 
and  international  good-will. 

I  know  of  no  expressions  of  modern  statesmanship  bet- 
ter worthy  of  being  borne  in  mind  by  every  American 
citizen,  and  regarded  as  axiomatic  in  our  conduct  toward 
our  sister-States  and  Canada,  than  those  terms  of  glow- 
ing eloquence  in  which  Hon.  John  Bright  depicted  his 


COMMERCIAL   RELATIONS   WITH   CANADA.       177 

1  opes  tli at  the  day  would  come  when  the  whole  of  this 
ast   continent    might   become    one   great  federation  of 
states,  and,  free  from  military  control,  without  a  custom- 
i  ouse  inside  through  the  whole  length  and  breadth  of  its 
1  erritory,  but  with  freedom  everywhere,  equality  every- 
where, law  everywhere,  peace  everywhere,  would  afford 
.  t  least  some  hope  that  man  is  not  forsaken  of  heaven, 
nd  that  the  future  of  our  race  might  .be  better  than  the 
•n-t. 

The  Right  Honorable  W.  E.  Gladstone,  when  premier, 
peaking  in  a  debate  in  the  House  of  Commons,  lamented 
hat  it  had  been  the  fate  of  the  transatlantic  possessions 
>f  European  nations  that  in  every  instance  when  they 
lad  reached  maturity  separation  had  been  carried  out  by 
var  or  bloodshed,  leaving  behind  them  feelings  of  pain, 
latred,  or  shame.  He  declared  the  true  policy  toward 
Janada  to  be  that,  if  separation  should  arrive  it  may  come 
n  a  friendly,  and  not  a  hostile  form,  but  in  true  accord 
vith  the  best  spirit  of  the  age. 

It  seems  to  me  that  we  do  not  in  our  statesmanship 
Adequately  recognize  and  appreciate  the  relations  actually 
•x  is  ting  between  Great  Britain  and  her  North  American 
Dossessions  or  adapt  our  policy  to  the  facts  as  they  are. 
3ne  of  the  main  errors  of  Great  Britain  in  her  treatment 
>f  those  colonies  from  which  our  Union  was  formed  was 
:he  discouragement  of  their  industry,  except  so  far  as  it 
v^as  subsidiary  to  her  own.     Perhaps  no  part  of  her  con- 
luct  toward   us  was  more  unjust  or  injurious,  or  contri- 
buted more  powerfully  to  the  causes  of  the  Revolution. 
I  frar  that  the  recollection  of  it,  rankling  in  our  memo- 
iias  sometimes  led  us  to  such  legislation  in  commer- 
cial affair-  as  we  have  been  satisfied  to  think,  must  be 
beneficial  to  ourselves,  because  it  is  inconvenient  or  pre 
judicial  to  others.     This  is  one  of  the  most  prevalent  and 
ernicioos  sophistries  by  which  mankind  has  ever  been 
eluded  and  afflicted.     Let  us  look  to  ourselves  and  take 
eed  lest  in  our  day,  in  the  plentitude  of  our  power,  and 
t  a  more  enlightened  period  of  the  world's  history,  we 
our  commercial  treatment  of  weaker  neighboring  States 
ill  into  the  same  kind  of  error  as  that  which  Great  Bri- 
ain  practiced  toward  us,  but  has  utterly  discarded  in 
12 


178       COMMERCIAL   RELATIONS   WITH   CANADA. 

her  modern  treatment  of  her  colonies.  Canada,  it  is  true, 
is  not  our  possession,  but  as  compared  with  the  United 
States  she  is  practically  in  her  infancy.  In  refusing  even 
to  consider  by  what  means  our  trade  with  her  can  be  in- 
creased with  mutual  benefit  to  the  people  of  both  coun- 
tries, we  follow  the  evil  example  set  us  in  a  more  aggra- 
vated form  by  Great  Britain  in  the  early  days  of  our 
own  history. 

Sanguine  and  vivid  expectations  have  been  entertained 
by  some  who  laid  claim  to  profound  knowledge  and 
statesmanlike  views,  but  who  have  lived  to  see  the  error 
of  their  hopes,  that  by  a  rigorous  and  exclusive  policy 
Canada  would  speedily  be  compelled  to  implore  annexa- 
tion to  the  Union.  The  time,  it  has  long  ago  been 
publicly  said,  before  she  would  thus  be  brought  on  her 
knees  wTas  so  short  that  it  should  be  "counted  by  months, 
and  not  by  years ;  but  experience  has  only  made  more 
evident  what  was  from  the  beginning  sufficiently  obvious, 
that  the  Canadians,  being  of  the  same  human  nature  with 
ourselves,  actuated  by  similar  sentiments  and  passions, 
are  repelled  by  repulsion  while  they  might  be  attracted 
by  a  friendly  and  liberal  policy,  which  through  a  natural 
and  interminable  series  of  profitable  transactions  would 
bring  people  already  homogeneous  more  and  more  into 
communication  with  each  other. 

It  cannot  be  said  that  there  is  any  real  want  of  friendly 
feeling  in  the  United  States  toward  the  Canadians. 
Many  of  them  migrate  to  this  country,  and  are  soon 
scarcely  distinguishable  from  .our  native-born  citizens, 
not  a  few  of  whom  have  taken  up  their  abodes  in  the 
Dominion  and  become  prosperous  and  prominent.  If 
Canada  should  be  oppressed,  and  to  gain  her  liberty  and 
rights  be  driven  to  arms  as  we  were  at  the  time  of  the 
Revolution,  our  sympathy  from  one  end  of  the  Union  to 
the  other  would  not  merely  be  sentimental,  but  would 
evince  itself  by  practical  demonstrations  at  every  point 
of  our  frontier.  Happily  for  all  the  parties  concerned, 
the  prospect  of  any  such  contingency  has  long  passed, 
and  the  appropriate  way  of  testifying  our  good-will  is 
not  by  self-immolation  in  the  loss  of  life  and  material 
wealth,  but  by  the  sacrifice  of  an  old  prejudice  and  an 


COMMERCIAL   RELATIONS   WITH   CANADA.       179 

nit-worn  theory  and  the  adoption  of  such  commercial 
Measures  as  will  promote  our  interests  as  well  as  those  of 
mr  neighbors. 

I  have  said  that  Canada  has  wisely  pursued  a  more 
iberal  course  toward  the  United  States  than  we  have 
owards  her.  She  admits  our  manufactures  on  equal 
:ernis  with  those  of  Great  Britain,  and  at  very  moderate 
•ates  of  duty.  The  chief  products  of  our  agriculture 
ire  admitted  free  of  all  duty  whatever.  At  the  same 
dme  this  liberality  redounds  to  her  benefit.  She  is  study- 
ing her  own  interest.  By  charging  no  duties  on  our 
flour,  wheat,  corn,  and  other  grain  she  obtains  a  large 
surplus  for  exportation  and  encourages  transportation  and 
the  profitable  employment  of  her  people  from  one  end  of 
her  railroads  and  canals  to  the  other.  She  finds  her  own 
profit  in  all  this.  The  prices  of  wheat,  flour,  corn,  cheese, 
ami  cut  meats  are  telegraphed  to  this  side  of  the  Atlantic 
and  regulate  our  own.  They  are  posted  up  and  pro- 
claimed in  our  leading  marts  of  trade.  Even  in  fresh 
meats  a  vast  trade  with  Europe  is  rapidly  progressing. 
Immense  quantities  are  weekly  exported  from  the  United 
States  and  Canada,  and  in  a  few  years  Great  Britain  will 
be  at  least  as  dependent  on  this  continent  for  her  supplies 
of  fresh  beef  and  other  meats  as  she  now  is  for  bread- 
stuffs.  As  the  prices  in  foreign  markets  mainly  determine 
those  here  and  in  Canada,  it  is  suicidal  to  many  of  our 
mercantile,  manufacturing,  and  carrying  interests,  and 
beneficial  to  no  other  interests  whatever  to  charge  duties 
on  the  importation  into  this  country  of  the  farming  pro- 
ducts I  have  named,  and  the  list  could  be  very  widely 
extruded.  Our  exportation  to  Canada  of  all  these  articles 
is  enormously  greater  than  hers  to  us,  and  it  is  created 
mainly  by  those  exportations  to  Europe  which  we  impede 
by  our  laws  while  Canada  gives  facilities  for  them.  For 
instance,  in  1875  our  imports  of  wheat  from  Canada 
undrr  our  tariff  amounted,  according  to  our  official 
statistics,  to  only  $296,588,  while  our  exports  to  her  were 
)f  the  value  of  $6,070,167  in  gold.  A  certain  class  of 
theorists  may  think  they  detect  in  this  a  very  favorable 
Balance  of  trade.  In  reality  it  represents  how  much  of 
mr  wheat  was  exported  to  Europe  by  Canadian  routes. 


180       COMMERCIAL   RELATIONS   WITH   CANADA. 

The  enlargements  now  in  progress  on  the  Canadian  canals 
will  force  public  attention  to  these  facts.  We  ought  to 
be  prepared  to  meet  them  in  advance.  When  our  ports 
were  open  to  the  free  admission  of  Canadian  wheat  our 
forwarders  and  merchants  and  their  employes  reaped  the 
profits.  There  was  also  a  local  benefit  to  our  millers  and 
many  communities.  Thus,  when  I  speak  of  a  liberal 
policy  I  do  no  not  mean  that  of  self-destruction  or  sacrifice 
of  our  own  interests,  but  one  in  which  the  benefits  of 
mutual  profit  are  recognized,  a  belief  with  which  the 
issues  of  individual  and  national  well-being  are  most 
intimately  connected,  and  that  short-sighted  view — the 
most  pernicious  and  perhaps  the  most  common  of  all 
political  errors — that  the  gain  of  one  man  or  nation  must 
be  the  loss  of  another,  is  discarded. 

Besides  the  additions  to  our  direct  exports  and  the 
increase  in  the  sales  of  our  manufactures  both  to  Canada 
and,  through  a  better  supply  of  raw  materials,  to  other 
countries,  which  might  be  secured  by  means  of  a  fair 
treaty  of  commerce  with  Canada,  other  points  demand 
our  consideration.  Year  after  year  the  Canadians  have 
continued  their  liberal  treatment  of  our  trade  and  manu- 
factures in  the  hope  that  the  whole  system  of  commerce 
might  be  remodelled  between  us  with  due  regard  to  the 
interests  of  both  countries,  but  incited  by  our  large  expor- 
tations  the  protectionist  theories  grow  yearly  stronger  and 
stronger  in  Canada,  and  if  her  people  should  adopt  a 
system  of  what  are  sometimes  called  "  reciprocal  duties," 
charging  on  our  productions  the 'same  duties  as  we  levy 
on  hers,  the  result  would  be  ruinous  and  almost  prohibi- 
tory on  our  exports  to  her.  If,  on  the  other  hand,  the 
Dominion  should  renew,  as  is  sometimes  suggested,  a 
closer  connection  with  Great  Britain,  the  trade  between 
those  two  countries  might  become  as  free  and  untram- 
melled as  it  is  between  all  the  States  of  our  own  Union. 
In  this  event  it  would  manifestly  be  impossible  to  check 
smuggling  on  an  enormous  scale  from  the  Dominion  into 
the  "United  States.  The  difficulties  already  attending 
a  proper  surveillance  of  our  northern  frontier  were  lately 
described  by  the  Secretary  of  the  Treasury  as  being  in 
some  respects  insurmountable.  In  the  contingency  to 


COMMERCIAL   RELATIONS   WITH    CANADA.       181 

-rhich  T  have  alluded  an  addition  of   several  thousands 

<  >f  men  to  our  revenue  service,  with  the  accompanying 

<  xpense,  would  not  suffice  to  prevent  a  vast  illicit  trade, 

Ivith  demoralizing  effects  on  our  people  and  incalculable 
a  jury  to  our  revenue. 
I  look  forward  to  that  time  in  the  not  distant  future 
dien  a  truly  fraternal  comity  shall  prevail  throughout 
his  continent  from  that  habitable  part  of  it  which  is  near- 
est the  arctic  regions  to  the  tropics,  and  from  the  Atlantic 
,o  the  Pacific  Ocean ;  and  when  this  sentiment  shall  find 
ts  natural  expression,  not  in  lawless  and  desolating  fili- 
bustering expeditions,  or  hostile  inroads  of  any  kind,  but 
3e  manifested  and  continually  increased  by  those  peace- 
ful exchanges  of  the  products  of  human  industry  which 
/ield  profitable   employment   and   make   homes  happy. 
Nature  herself,  in  the  varieties  of  climate  and  resources, 
has  provided  for  this  plan  by  permanent  and  beneficial 
laws  against  which  we  make  our  temporary  and  destruc- 
tive statutes.     From  such  a  continental  and  truly  Ameri- 
can system,  we  who  occupy  a  central  position  between 
the  North  and  South  should  not  only  satisfy  our  needs, 
but  by  being  the  merchants  and  carriers  for  our  neighbors 
on  both  sides  derive  larger  profits  than  any  of  them. 
Because  in  population  and  power  we  are  the  foremost 
nation  of  the  continent,  it  becomes  our  duty  to  ourselves 
and  to  others  to  take  the  lead  in  giving  practical  develop- 
ment to  the  bounties  which  Providence  has  placed  within 
our  reach.     The  first  step  toward  its  attainment  is  by 
ascertaining  definitely  through  inquiries  made  by  efficient 
and  reliable  commissioners  how  far  we  can  extend  our 
commercial  relations  with  Canada,  whose  people  and  gov- 
ernment invite  us  not  less  by  their  stable,  intelligent,  and 
progressive  character  than  by  the  assurances  they  have 
already  more  or  less  formally  given   us.     Of  all  affairs 
of  foreign  policy  this  opportunity  of  cheapening  the  ma- 
terials of  our  manufactures  and  extending  our  markets  is 
the  most  important.     Next  to  integrity  in  our  Govern- 
ment and  the  preservation  of   our  liberties,  no  subject 
more  deeply  concerns  the  interests  of  the  people.     My 
motion  is  simply  for  the  appointment  of  a  commission  of 


182       COMMERCIAL  RELATIONS   WITH   CANADA. 

inquiry.  It  is,  so  far  as  I  know,  unanimously  approved 
by  the  leading  commercial  and  business  men  of  the  coun- 
try without  distinction  of  party,  and  should  meet  with 
the  same  just  consideration  from  both  parties  in  this 
House. 


THE 

FINANCIAL    CONDITION    OF    THE    NATION. 


HOUSE  OP  REPRESENTATIVES,  January  15,  1863. 


At  the  time  when  this  speech  was  delivered,  the  crude  and 
>ernicious  errors  through  which  the  national  debt  and  taxation 
enormously  increased  were  advanced  and  defended  by  the  high- 
:st  officiarauthorities.  It  was  maintained  that  paper  money  had 
»ot  depreciated,  but  that  gold  had  advanced  in  value.  On  be- 
lalf  of  the  producing  and  mercantile  interests,  Mr.  Ward  pro- 
ested  earnestly  against  this  and  similar  sophisms,  and  thoroughly 
malvzed  the  financial  system  adopted  by  the  then  Secretary  of 
he  Treasury,  testing  it  by  abstract  principles  and  the  experience 
>f  our  own  country  and  other  nations. 

MR.  CHAIRMAN  :  The  condition  of  our  financial  affairs 
ind  the  regulation  of  the  circulating  medium  are  re- 
garded with  much  anxiety  by  the  people  of  this  coun- 
try, from  motives  of  their  own  personal  interest,  and  yet 
more  from  patriotic  devotion  to  the  cause  of  unity  in  our 
great  struggle  for  national  existence.  Civilized  society 
itself  relies  upon  the  instrument  of  trade  and  commerce, 
termed  money,  for  the  regulation  of  all  economical  affairs 
roniu'ctcd  with  the  creation  and  equitable  distribution 
of  wealth.  If  the  monetary  system  be  deranged  our 
varied  national  resources,  in  common  with  those  of  indi- 
viduals, become  subject  to  innumerable  disasters,  against 
which  no  human  foresight  can  guard.  The  losses  of  the 
last  year  have  enabled  us  to  appreciate  this  truth  more 
fully.  We  have,  I  trust,  learned  something  within  that 
time.  For  myself,  I  am  free  to  confess  that  although  my 
record  upon  this  question  remains  to-day  exactly  as  I 

ould  have  it,  I  am  among  those  who  have  been  learning 
m  that  inexorable  teacher,  experience. 


184        FINANCIAL   CONDITION    OF   THE   NATION. 

I  have  been  and  yet  am  desirous  of  supporting  the 
Government  of  my  country  in  a  vigorous  prosecution  of 
the  war.  If  on  any  subject  the  North  does  not  present 
an  unbroken  front,  in  perfect  unity  of  feeling,  the  fault 
does  not  rest  with  myself.  My  vote  has  aided  in  furnish- 
ing for  the  defence  of  the  Union,  not  only  all  needful 
supplies  of  that  which  faithfully  represents  the  products 
of  the  industry  of  our  country — money,  the  sinews  of 
war — but  in  placing  at  the  disposal  of  the  legally  ap- 
pointed officers  of  the  Government  that  which  is  yet 
more  precious,  the  invaluable  lives  of  the  men  who  con- 
stitute the  brave  armies  of  the  Union.  I  could  not  con- 
trol the  expenditure  of  the  money,  or  prevent  the  sacri- 
fice of  the  men ;  nor  was  my  vote,  given  against  the  issue 
of  "legal  tender,"  sufficient  to  prevent  the  practice  of  an 
unsound  system  of  finance.  I  hoped  that  another  course, 
more  conducive  to  the  interests  of  the  nation,  would  have 
been  pursued ;  but  I  did  not,  nor  do  I  now,  question  the 
purity  of  motives  in  those  gentlemen  who  sustained  the 
views  I  deemed  it  my  duty  to  oppose.  I  believe  the  issue 
of  this  paper  money  was  an  unfortunate  measure ;  and 
now  that  we  have  from  practical  experience  a  thorough 
knowledge  of  the  influence  it  exerts,  there  should  be  only 
one  opinion  as  to  the  expediency  of  continuing  to  aug- 
ment the  volume  of  such  a  currency.  It  is  for  us  not  to 
aggravate  the  evil,  but,  so  far  as  is  possible,  to  devise 
measures  for  its  removal,  that  a  gradual  and  perfect  cure 
may  be  effected. 

When  it  was  decided  to  adopt  the  principle  of  "  legal 
tender,"  there  was  no  doubt  that  the  majorities  of  both 
Houses  who  voted  for  it  did  so  because  they  considered 
it  the  least  objectionable  of  the  measures  under  consider- 
ation. Here,  permit  me  to  say  that  I  know  of  no  greater 
trial  for  a  statesman  or  a  legislator  than  this — to  be  com- 
pelled to  choose  between  two  measures  when  his  judg- 
ment condemns  them  both ;  when  his  only  course  is  that 
laid  down  in  the  common  maxim  of  life,  to  choose  the 
least  of  any  number  of  evils.  The  whole  question  is  full 
of  difficulties  arising  out  of  the  mutations  of  commerce 
as  well  as  the  exigencies  of  nations.  Numerous  theories 
and  suggestions  have  been  presented  by  prominent  citi- 


FINANCIAL   CONDITION    OF   THE   NATION.        185 

is  in  various  parts  of  the  country ;  but  all  experience 
las  demonstrated  the  impossibility  of  securing  lasting 
)rosperity  for  any  country  which  persistently  adheres  to 
,he  use  of  a  legalized  but  irredeemable  paper  currency. 

I  have  heard  with  the  utmost  pain  and  regret,  some  of 
the  opinions  expressed  by  gentlemen  who  hold  high 
}fficial  positions,  and  who,  by  long  careers  of  life  spent 
in  the  legislative  service  of  their  country,  have  honorably 
won  for  themselves  no  small  share  of  confidence  from  this 
House  and  from  the  people.  In  the  great  epoch  of  this 
age,  I  have  turned  with  anxious  expectation  to  the  official 
report  of  the  statesman  who,  by  the  desire  of  the  Pres- 
ident of  the  United  States  and  of  a  large  portion  of  our 
fellow-citizens,  has  been  chosen  to  discharge  the  grave 
and  arduous  duties  of  the  Secretary  of  the  Treasury,  and 
to  the  speeches  delivered  in  this  House  by  the  Chairman 
of  the  Committee  of  Ways  and  Means.  Differing,  as  I 
do,  from  the  Secretary  of  the  Treasury  on  that  cardinal 
question  of  our  day,  the  strict  application  of  free  local 
self-government  alike  to  northern  and  southern  States,  so 
far  as  it  is  compatible  with  the  maintenance  of  the 
Union,  I  hoped  to  have  seen  him  mindful  of  the  distinc- 
tion between  promptitude  and  procrastination,  paying 
and  promising  to  pay  real  money,  and  that  paper  fiction 
which,  in  the  phraseology  of  the  day,  is  called  u  legal 
tender ; "  firm  and  steadfast  in  his  allegiance  to  those 
principles  of  financial  economy  yet  held  by  the  great 
party  of  which  he  was  formerly  a  member,  and  which 
commanded  his  respect  and  approval  through  long  years 
of  calm  reflection,  when  he  was  unbiased  by  the  disturb- 
ing influence  of  that  one  dark  enigma  now  absorbing  so 
large  a  share  of  public  attention,  and  causing  the  expen- 
diture of  so  much  of  our  national  substance,  and  the 
sacrifice  of  so  many  lives.  I  should  have  been  deeply 
gratified  if  I  had  been  able,  by  the  support  of  the  Gov- 
ernment, to  win  from  my  political  opponents  the  reputa- 
tion I  deserve,  of  being  swayed  by  no  partisan  motives, 
and  solrly  1>\  a  desire  for  the  welfare  of  the  Republic. 

In  the  report  of  the  Secretary,  I  find  that  while  to 
some  extent  apparently  opposing  the  further  increase  of 
the  currency  through  the  issue  of  more  notes  by  the 


186       FINANCIAL   CONDITION   OF   THE   NATION. 

United  States,  he  denies  that  the  remarkable  appreciation 
in  the  value  of  gold — or  rather,  to  speak  accurately,  the 
decrease  in  the  value  of  fictitious  money  as  compared 
with  money  itself,  is  wholly,  or  even  for  the  greater  part, 
owing  to  the  large  volume  of  paper  promises  to  pay.  He 
doubts  if  "the  aggregate  currency  of  the  country,  con- 
sisting of  United  States  notes  and  notes  of  corporations, 
is  at  this  moment  greatly  in  excess  of  legitimate  demands 
for  its  employment,"  or  if  "  any  actual  excess  is  due  to 
the  issues  of  United  States  notes  already  in  circulation." 
In  attempting  to  vindicate  his  position,  he  assumes  that 
the  amount  of  coin,  estimated  by  him  to  have  been  $210- 
000,000,  circulating  and  in  the  banks  on  the  1st  day  of 
November,  1861,  had  been  practically  demonetized  and 
withdrawn  from  use  as  currency,  or  as  a  basis  for  currency, 
and  it  is  therefore  excluded  from  his  estimate ;  when,  in 
fact,  with  exceptions  trivial  in  comparison  with  the  whole 
amount  of  specie,  it  was  never  used  as  currency,  and  the 
banks,  while  they  have  suspended  metallic  payments,  yet, 
as  is  asserted  by  the  Secretary  himself,  retain  an  increased 
amount  of  gold  and  silver  for  purposes  of  their  own 
security,  and  as  a  basis  for  their  present  circulation  and 
a  future  resumption  of  those  specie  payments  they  were 
induced  to  suspend  by  the  anticipation  of  the  policy  then 
foreshadowed  and  afterwards  adopted,  in  the  issue  of 
Treasury  notes  not  redeemable  in  coin.  At  the  same 
time,  the  bank  circulation  in  the  loyal  States,  partly  in 
consequence  of  the  suspension  of  specie  payments,  has 
increased  about  thirty  per  cent.,  or  from  $130,000,000  in 
1861,  to  $167,000,000  in  1862.  Assuming,  then,  the 
Secretary  to  be  correct,  and  taking  gold  only  at  a  premium 
of  thirty  per  cent. — considerably  less  than  its  average 
price  for  several  months — the  purchasing  power  of  the 
hard  money  at  that  time  was  $373,000,000,  or  $63,000,000 
more  than  in  1861,  if,  for  the  sake  of  argument,  I  concede 
more  than  the  truth  requires,  and  assume  that  the  paper 
has  not  become  depreciated.  This  specie,  the  only  true 
money  of  the  country,  has  not  been  annihilated,  become 
dead  capital  or  "  demonetized,"  as  is  said  in  the  report, 
by  one  of  those  novel  and  mysterious  expressions  which 
are  often  coined  and  used  for  the  occasion,  in  preference 


I 


FINANCIAL   CONDITION   OF     THE   NATION.      187 

a  our  own  plain  Saxon  words,  when  complexity  and 
jonfusion,  not  simplicity  and  clearness,  are  the  desired 
>bjects.  The  amount  of  precious  metals  in  the  United 
States  has  not  even  been  diminished,  but  increased,  during 
the  year  in  question. 

In  the  same  short  space  of  twelve  months  the  cir- 
culation of  the  notes  of  the  United  States,  includ- 
ing credits  to  disbursing  officers  and  to  the  Treas- 
urer of  the  United  States,  was  swollen  from  $15,140,- 
000  in  1861,  to  the  enormous  sum  of  $210,104,000, 
being  over  $80,000,000  more  than  the  whole  amount  of 
the  notes  of  corporate  banks  throughout  the  loyal  States 
in  1861. 

From  these  facts  it  follows  that  the  aggregate  circula- 
tion of  the  loyal  States,  which  at  the  first  date,  1861,  was 
$355,140,000,  was  not,  as  stated  by  the  Secretary,  only 
$377,104,000  in  1862,  but  nearly  $650,104,000.  The 
increase  in  the  currency  of  the  loyal  States  in  one  year 
alone  has  been  nearly  equal  to  the  whole  amount  of  paper 
money  in  the  country  at  any  former  period  in  our  exist- 
ence, when  we  included  in  our  estimates  the  whole  of 
the  United  States  from  Maine  to  Texas. 

Starting  with  his  erroneous  position  that  the  only  true 
money  of  the  country  is  no  longer  any  money  at  all — 
using  this  as  a  foundation  for  subsequent  arguments,  and 
assuming  that  the  increase  of  the  National  circulation, 
estimated  in  "legal  tende'r,"  is  only  $22,000,000  instead 
of  $355,104,000,  the  Secretary  easily  adds  other  links  to 
the  chain  of  his  delusions.  If  the  $22,000,000  were  really 
the  only  increase  in  the  currency  of  the  loyal  States 
during  the  year  in  question,  his  assertion  that  it  was 
"  legitimately  demanded  by  the  changed  condition  of  the 
country  in  the  year  between  the  two  dates "  might  be 
permitted  to  pass  unnoticed.  He  speaks  of  the  in- 
sufficiency of  the  bank  circulation  to  support  the  great 
activity  in  business  resulting  from  enormous  military  and 
naval  preparations,  and  is  apparently  ignorant  of  the  vast 
.•un<>unt  of  trade  formerly  enjoyed  with  the  Southern 
States — but  now  lost  to  us — and  of  the  power  of  the 
banks  themselves,  by  means  of  bills  of  exchange,  drafts, 
checks,  and  certificates  of  deposit,  to  transact  any  amount 


188       FINANCIAL   CONDITION   OF   THE   NATION. 

of  business  that  the  necessities  of  the  nation  even  yet 
require.  New  York  is  the  great  business  centre  of  the 
Union.  Nearly  all  our  domestic  and  foreign  exchanges 
meet  in  that  commercial  emporium  or  metropolis.  In 
that  city  alone  banking  facilities  exist  for  the  transaction 
of  business  amounting  to  $20,000,000  daily,  or  about  ten 
times  the  estimated  daily  expenses  of  the  Government 
when  engaged  in  the  present  war. 

It  was  not  difficult  to  pass  on,  from  the  belief  that  the 
currency  of  the  country  had  undergone  so  slight  an  in- 
crease, to  the  assertion  that  no  undue  inflation  in  currency 
or  prices  now  exists.  Outside  of  official  circles,  and  by 
every  man  who  is  unbiased  by  political  prejudices,  or  the 
vain  desire  to  prop  an  inherently  vicious  system  of  finance, 
the  existence  of  this  inflation  is  universally  well  known 
and  admitted.  It  is  known,  not  only  to  our  financiers 
and  merchants,  but  is  painfully  felt  in  the  home  of  the 
laborer,  and  made  palpable  by  practical  facts  and  figures 
to  every  one  who  purchases  the  common  articles  necessary 
for  daily  food  and  clothing;  and  the  evil  is  daily  becoming 
more  hurtful  and  notorious.  The  report  of  the  Secretary 
tends  to  create  confusion  by  comparing  the  prices  of 
wheat,  pork,  and  corn  on  the  1st  day  of  November,  1861, 
with  those  on  the  corresponding  day  in  1862.  It  is  true 
that  while  the  prices  of  many  staple  articles  of  food  and 
clothing  bought  by  the  northern  farmer  and  laborer  have 
been  doubled,  and  in  many  cases  more  than  doubled,  the 
chief  agricultural  products  of  the  North  have  been  so 
injuriously  affected  that  even  their  nominal  value  has 
been  little  changed.  Pork,  for  instance,  one  of  the  great 
western  staples  of  trade,  sold  for  less  on  the  1st  of  May 
last  year,  and  now  sells  for  less  in  depreciated  paper 
money  than  it  ever  brought  in  gold  during  the  ten 
preceding  years.  On  the  1st  day  of  May,  1862,  the 
market  price  of  prime  pork  in  New  York  was  $12.62J,  or 
about  fifteen  per  cent,  less  than  $14.50,  the  lowest  price 
it  ever  reached  on  any  corresponding  day  since  1850. 

The  Secretary  ignores  the  effects,  so  injurious  to  the 
vast  farming  interest,  produced  by  the  large  quantities 
of  the  cereals  already  forwarded  to  market,  by  the 
abundant  crops  of  Europe,  and  the  enforced  idleness  of 


FINANCIAL   CONDITION   OF   THE   NATION.       189 

hose  numerous  industrial  and  commercial  classes  of 
Europe  who  are  the  chief  foreign  consumers  of  our  pro- 
-isions,  who  depend  upon  a  supply  of  cotton  from  this 

|<x>untry,  and  by  its  withdrawal  are  rendered  unable  to 
mrchase  as  much  as  they  require  of  our  breadstuffs  and 
.urplus  agricultural  productions.  The  farmer  finds  that 
vhile  the  prices  of  that  which  he  has  to  sell  have.seem- 
ngly  but  little  changed,  he  is  compelled  to  pay  increased 
prices  for  nearly  all  that  he  buys. 

The  Secretary  says  nothing  of  those  disturbances  in 
bhe  valley  of  the  Mississippi,  which  have  not  only  injured 
our  market  in  the  Southern  States,  but  also  in  those 
parts  of  the  world  to  which  western  produce  finds  the 
cheapest  access  through  that  great  highway  or  artery  of 
the  interior.  He  labors  to  prove  that  gold  has  increased 
in  value,  and  that  his  paper  money  has  not  depreciated. 
In  truth,  the  condition  of  the  commercial  system  is  indi- 
cated almost  as  infallibly  by  gold  as  the  temperature  of 
the  atmosphere  is  shown  by  the  mercury  in  the  thermom- 
eter. Not  an  article  sold  in  this  country,  but  capable  of 
being  carried  abroad,  can  for  many  days  together  con- 
tinue to  be  sold  for  legal  tender  paper  without  an  infla- 
tion of  price  at  least  equal  to  the  difference  between  the 
price  of  gold  and  its  fictitious  substitute.  Take  grain 
and  pork,  the  articles  named  by  the  Secretary,  as  familiar 
instances.  Can  it  be  supposed  for  a  moment  that  if 
their  price  in  paper  money  is  their  real  value,  our  Cana- 
dian neighbors,  or  our  own  shrewd  fellow-citizens,  who 
are  always  awake  to  such  an  opportunity,  would  not  at 
once  buy  up  these  articles,  take  them  into  the  provinces, 
where  gold  is  at  par  and  American  silver  at  a  discount 
of  four  or  five  per  cent.,  bringing  back  hard  money  with 
them,  and  selling  it  for  paper  currency  at  a  premium  of 
more  than  forty  per  cent.  ? 

The  commercial  value  of  all  exchangeable  commodities 
is  their  price  in  the  markets  of  the  world.  Our  country- 
men— and  they  are  not  the  only  competitors  in  this  race 
—aided  by  the  rapid  missions  of  the  newspaper  and 
telegraph,  keep  well  in  Formed  in  these  prices,  and  unless 
they  can  sell  for  legal  tender  at  an  enhanced  rate,  will 
semi  their  property  to  foreign  countries  and  obtain  in 


II 

men 

,al 


190       FINANCIAL   CONDITION   OF   THE   NATION. 

exchange  for  it  either  the  precious  metals  with  which 
they  can  buy  paper  money  at  its  diminished  valuation,  or 
such  merchandise  as  will  yield  a  yet  larger  profit. 

The  rule  is  of  wide  application.  It  is  true  as  regards 
almost  every  article  produced  in  the  United  States.  It 
influences  manufactures  themselves,  and  the  materials 
from  which  they  are  made. 

So  much  for  articles  of  domestic  origin.  I  shall  not 
be  asked  to  prove  that  articles  of  foreign  origin  cannot 
be  bought  with  legal  tender,  as  a  medium  of  exchange,  at 
par.  or  that  foreigners  require  gold  or  its  substantial 
equivalent  from  us  in  all  our  dealings.  Dividend-paying 
stocks  and  securities,  and  nearly  all  other  forms  of  per- 
sonal property,  have  risen  in  nominal  value  to  a  greater 
extent  than  gold ;  and  the  general  inflation  has  already 
seriously  affected  the  price  of  real  estate  itself,  which 
many  cautious  men  are  beginning  to  purchase  as  a  secure 
investment,  safe  amid  that  general  ruin  which  they  see 
is  necessarily  approaching,  if  the  administration  now  in 
power  persists  in  its  desolating  policy. 

I  pass  over  the  third  argument  of  the  Secretary,  in  his 
attempts  to  prove  that  the  currency  is  not  redundant, 
with  an  expression  of  regret  and  humiliation  that  so 
feeble  a  device  or  error  should  have  found  its  way  into  so 
grave  and  important  a  document  as  the  report  issued 
from  the  Treasury  of  this  nation  at  this  important  crisis 
of  our  history.  It  is  not  only  unreasonable,  but  it  is  an 
undignified  trifling  with  the  subject,  to  name  the  tempo- 
rary premium  on  gold,  at  the  most  feverish  stage  of  a 
panic  which  lasted  only  for  a  few  days,  in  comparison 
with  the  lowest  premium  it  bore  during  the  subsequent 
revulsion,  to  prove  that  no  great  redundancy  of  currency 
exists.  The  last  quotation  shows  that  gold  is  now  at  a 
premium  of  forty-eight  and  one-half  per  cent.  His 
financial  system  had,  at  the  time  of  which  he  speaks, 
brought  gold  from  par  to  a  premium  of  at  least  thirty 
per  cent. ;  and  the  general  rule,  not  the  ephemeral  change, 
supplied  the  true  philosophy  and  moral  of  the  occasion. 
In  monetary  affairs,  as  in  physical  nature,  we  measure 
events  by  the  progress  of  the  tide—  not  by  the  little 
changes  of  the  rising  and  receding  ripples  ;  and  the  price 


II 


FINANCIAL  CONDITION   OF   THE  NATION.       191 

>f  gold,  stationary  for  some  months  at  thirty  or  thirty- 
wo  per  cent.,  and  now  risen  by  gradual  degrees  to  forty- 
>ight  and  one-half  per  cent,  furnishes  the  correct  index. 
My  reason  for  stating  these  facts,  which  are  or  should  be 
familiar  to  us  all,  is,  that  they  are  contradicted  by  the 
highest  financial  authority  in  the  country. 

The  circulation  of  the  banks  in  the  loyal  States  was 
expanded  during  the  year  intervening  between  the  first 
days  of  November,  in  1861  and  1862,  from  $130,000,000 
to  $167,000,000  ;  and  the  volume  of  deposits,  practically 
answering  many  of  the  purposes  of  circulation,  increased 
from  $264,000,000  to  $344,000,000.  A  corresponding 
stimulus  was  naturally  given  to  loans.  This  increase 
took  place,  as  the  Secretary  justly  observes,  chiefly 
within  the  last  seven  months  of  that  year — the  period 
during  which  the  enactment  of  laws  creating  legal  tender 
came  most  fully  into  operation. 

All,  or  nearly  allx  this  expansion  of  credit,  with  its 
enormous  increase  of  nominal  values,  has  been  produced 
by  the  pernicious  system  of  legal  tender.  These  notes, 
being  less  valuable  than  specie,  would  have  produced  a 
run  upon  the  banks  against  which  they  could  not  have 
maintained  themselves.  They  must  continue  a  suspen- 
sion of  specie  payments  in  order  to  avoid  ruin,  and  by 
the  national  legislation  were  thus  practically  absolved 
from  the  great  balance-wheel  or  principle  of  their  system, 
the  obligation  to  perform  their  contracts  and  keep  their 
promises  to  pay.  As  a  natural  consequence  they  fol- 
lowed the  example  of  the  Government,  and  issued  an  in- 
<•<!  amount  of  paper  money.  Conjointly  with  these 
causes  and  the  increase  of  nominal  value  requiring  more 
"  money  "  to  transact  the  same  amount  of  business,  arose, 
necessarily,  an  increase  in  the  amount  of  loans  and  de- 
posits.  It  was  foreseen  by  all  men  of  common  intelli- 
gence as  to  financial  affairs,  that  the  whole  chain  of  these 
events  must  be  produced  by  the  financial  policy  of  the 
Treasury. 

I  have  -lio\vn  that  we  already  experience  a  portion  of 

pernicious  effects  which  trie  universal  experience  of 

mankind   has  proved   must  follow  from  the  enactment  of 

laws  compelling  men  to  receive  pieces  of  paper  as  money 


192        FINANCIAL   CONDITION   OF   THE   NATION. 

without  providing  for  their  redemption  in  specie,  and 
that  prices  of  all  kinds  are  inflated.  The  merchant  and 
contractor,  in  making  sales  or  agreements,  charge  profit 
not  only  on  the  actual  value  of  the  articles  they  furnish, 
but  on  the  value  in  paper  money.  The  Government,  at 
the  present  time,  pays  for  all  its  uses  a  premium  of  at 
least  forty  or  fifty  per  cent,  above  its  actual  value,  equiv- 
alent, in  effect,  to  a  corresponding  depreciation  in  our 
national  securities. 

The  dealer  who,  a  few  months  ago,  sold  his  goods  at 
a  fair  profit  on  time,  finds  himself  when  he  is  paid  unable 
to  replace  his  stock.  From  the  uncertainty  attending 
the  future,  business  is  thrown  more  and  more  into  the 
hands  of  the  few  who  are  able  to  buy  and  sell  for  cash. 
The  country  is  suffering  from  the  demoralizing  effects  of 
financial  doubt  and  uncertainty,  already  so  great  that 
ordinary  mercantile  investment's  are  losing  their  legiti- 
mate character  of  efforts  to  supply  the  demands  of  the 
people,  and  are  becoming  guesses  or  chances  like  those 
in  a  lottery — dependent  upon  the  unknown  and  secret 
will  of  the  officers  and  advisers  of  the  Government,  and 
the  influence  they  exert  in  the  price  of  that  which  is  given 
and  received  as  the  standard  of  value.  The  relation  be- 
tween debtor  and  creditor  on  all  previously  existing  pe- 
cuniary contracts  has  been  arbitrarily  changed.  Each 
merchant,  jobber,  and  retailer,  charging  a  percentage  on 
the  increased  price  of  the  article  which  passes  through 
his  hands,  the  continued  and  progressive  accumulation  of 
prices,  presses  with  peculiar  hardship  and  severity  upon 
the  laboring  man,  whose  wages,  in  times  like  these,  are 
the  last  of  all  things  to  rise.  The  clerk  who  has  agreed 
to  work  for  a  salary,  and  has  arranged  his  expenses  in 
accordance  with  his  means,  finds  himself  unexpectedly, 
and  from  no  fault  of  his  own,  unable  to  meet  his  daily 
expenses.  The  family  of  him  who  has  spared  from  his 
income  a  small  sum  for  life  insurance,  finds  the  result  of 
his  hard  earnings  reduced  by  these  deplorable  laws,  upon 
the  death  of  the  father,  more  than  one-third,  nearly  one- 
half  of  the  just  amount.  By  the  practice  of  constant  econ 
omy,  parent  of  many  virtues,  numerous  day-laborers  and 
other  persons  have  deposited  in  savings-banks  a  sum 


FINANCIAL   CONDITION   OF  THE   NATION.        193 

estimated  as  amounting  to  at  least  two  hundred  and  fifty 
i  dllion  dollars  in  the  Free  States.  The  depreciation  in 
t  lese  frugal  savings  of  the  most  industrious  classes  is 
i  Iready  more  than  one  hundred  millions  of  dollars.  It 
contrasts  strangely  with  the  sums  realized  by  fraudulent 
c  3ntractors,  and  with  the  enormous  fortunes  made  by  the 
speculators  who  know  beforehand  the  intentions  of  the 
,  administration.  The  motive  for  industry  and  economy 
i  *  thus  impaired  among  one  of  the  most  deserving  classes 

<  f  the  people  by  abusing  their  confidence  and  destroying 
i  heir  sense  of  security.     The  state  fares  ill,  indeed,  when 
:  avorites  thus  flourish ;  when  the  industrious  are  deprived 

<  -f  their  earnings  by  the  Government  which  should  pro- 
ect  them,  and  the  idle  and  rapacious  are  enriched  from 
he  spoils  of  the  better  part  of  the  community. 

The  soldier  and  sailor  of  the  regular  Army  and  Navy, 
ogether  with  those  who,  in  the  hour  of  our  peril,  have 
lobly  come  forward  to  give  their  lives,  if  need  be,  to  the 
-ervice  of  their  country,  thus  lose  nearly  half  of  their 
>ay,  by  the  act  of  that  Administration  whose  commands 
;hey  loyally  obey,  however  repugnant  the  ruling  policy 
nay  be  to  their  convictions  regarding  the  welfare  and 
;rue  honor  of  the  nation.  Where  men  enlisted  under  a 
stipulation  that  their  pay  should  be  thirteen  dollars,  they 
receive  considerable  less  than  eight  dollars  in  actual 
value.  Pensions  for  the  maimed  and  wounded  are  re- 
luced  in  the  same  proportion.  He  who  dies  upon  the 
field,  and  leaves  behind  him  a  widow  and  orphan  chil- 
dren depending  upon  the  bounty  of  his  country,  whose 
gratitude  he  so  well  merits,  and  in  whom  he  had  confided 
with  the  proud  love  of  his  heart,  knows  that  the  cold 
charity  of  a  pension  thus  unjustly  diminished  is  all  that 
will  be  doled  out  to  them;  but  he  knows  not  what  will 
be  end  of  these  curtailments  now  already  so  far  ad- 
vanced. 

I  leave  the  legal  questions  arising  as  to  the  obligations 
f  contracts  and  the  consistency  or  conflicts  of  recent  en- 
tments  with  the  Constitution  of  our  country,  to  be  de- 
it  led  in  those  courts  of  law  where,  I  trust,  the  zeal  and 
•Kindness   of   party  strife  and  politics  may  never  enter, 
'y  purpose  in  this  place  at  present  is  to  discuss  the 
13 


194       FINANCIAL   CONDITION   OF   THE   NATION. 

tendency  and  effect  of  laws — not  their  constitution- 
ality. 

The  results  I  have  named  follow  naturally  from  the 
principle  of  what  is  called  "legal  tender,"  in  pursuance  of 
laws  as  unchangeable  as  those  of  arithmetic  or  gravitation. 
"We  may  make  whatever  laws  we  choose,  and  flatter  our- 
selves and  the  people  that  Nature  herself  will  yield  to  the 
warmth  of  our  desires  and  the  force  of  our  enactments ; 
but  real  value,  like  truth  itself,  which  in  reality  it  is,  will 
irrepressibly  assert  its  power.  The  story  related  of  the 
Saxon  king,  Canute,  who,  being  told  by  his  courtiers  that 
the  waves  themselves  would  obey  him,  placed  his  chair 
near  and  in  front  of  the  rising  tide,  and  called  his  syco- 
phants around  him,  has  been  frequently  applied  to  other 
monarchs  and  other  flatterers.  It  is  no  less  true  of  those 
who,  from  motives  of  personal  ambition,  or  in  the  vain 
pursuit  of  an  imaginary  public  good,  endeavor  to  delude 
the  people  into  a  vain  hope  that  we  can  successfully  con- 
tend against  the  laws  of  trade  and  finance.  Historical 
precedents  in  proof  of  ^Jbhis  assertion  are  numerous.  The 
volume  of  the  currency  of  the  rebellious  government  at 
Richmond  has  increased  so  rapidly  that  gold  is  said  to 
command,  at  least,  a  premium  of  one  hundred  and  fifty 
per  cent. ;  and  the  contractors  for  the  supplies  of  the 
rebel  army  have  agreed  among  themselves  to  make  no 
contract  with  that  Government  for  more  than  one  week 
in  advance. 

The  paper  money  of  France,  known  as  assignats,  during 
the  great  expansion  of  the-  currency  was  made  a  legal 
tender,  and  the  French  Government  of  that  day  punished 
with  death  those  who  refused  to  take  the  paper  at  its 
nominal  value.  The  result  was  a  deplorable  disturbance 
in  every  kind  of  exchange.  There  was  not,  there  never 
can  be,  any  practical  law  determining  prices  between 
buyer  and  seller ;  and  all  who  made  new  bargains  eva- 
sively refused  to  take  the  depreciated  money  in  payment, 
unless  they  received  double  or  treble  prices,  according  to 
the  degree  of  depreciation.  Nearly  all  creditors  were 
ruined,  because  they  were  obliged  to  accept  a  value 
merely  nominal.  Yet  this  form  of  legal  tender  was  se- 
cured by  real  estate — or  rather  was  fundable  in  land — • 


ANCIAL   CONDITION   OF   THE   NATION.        195 


it,  being  wanted  more  as  currency  than  for  investment, 
icarne  depreciated,  and  the  Government,  to  supply  the 
ss  sustained  by  the  deficiency,  frequently  increased  the 
sue,  until  it  became  worthless. 

It  is  instructive  to  observe  how  the  issue  of  assignats 

as  enlarged  to  suit  the  appetite  of  the  times.     From  one- 

:ilf  of  its  nominal  value  it  became  worth  one-sixth,  and, 

le  fiction  rapidly  tumbling  down  the  abyss,  I  find  it  re- 

c  )rded  that  silver  became  worth  one  hundred  and  fifty 

t  rnes  its  denomination  in  paper  before  the  assignats  were 

j  3garded  as  absolutely  worthless.     At  last,  by  common 

<  indent,  the  people  returned  to  a  metallic  currency. 

Examples  of  this  kind  have  not  been  wanting  in  our 

<  wn  country.     Already  we  find  each  dollar  of  the  Gov 

(  nmient  money  is  worth  less  than  sixty  cents  in  hard  cash. 
r  "hoinas  Jefferson,  when  writing  from  Paris  in  1786  to  M. 

<  e  Crevecceur,  records  the  worth  of  one  hard  dollar  both 
in  continental  and  Virginia  money,  in  1779  and  1780. 
.le  reminds  us  that  in  January,  1777,  seven  dollars  and 
"  \\ ciity-two  cents  of  continental  money  were  worth   no 
more  than  one  dollar  of  silver,  and  that  in  fifteen  months 
it  needed  no  less  than  forty  dollars  to  procure  the  same 

ilver  dollar.  In  January,  1779,  one  hard 'dollar  was 
vorth  eight  dollars  of  Virginia  money ;  and  in  December, 
L  780,  it  needed  seventy-five  dollars  of  the  same  paper  cur- 
•ency  to  purchase  one  substantial  or  real  dollar. 

The  State  of  Connecticut,  by  an  act  passed  October  4, 
L780,  regulating  the  "redemption  of  obligations,"  showed 

be  fluctuations  of  the  paper  issue  of  that  time,  between 

777  and  1780,  by  the  following  scale : 


Jan. 

I-Vh.    1,  1780 3,333 

"-h  1,1780 3,732  « 

i  18,  1780....  4,000  " 

It  is  unnecessary  to  follow  this  portion  of  the  subject 
ther. 


196       FINANCIAL   CONDITION   OF   THE   NATION. 

In  some  form  or  other  the  juggling  legerdemain  of  de- 
basing the  currency  of  the  country  has  been  a  favorite 
remedy  with  short-sighted  statesmen  of  every  nation, 
ancient  or  modern,  when  unable  to  meet  its  engagements 
promptly.  The  Romans,  at  the  end  of  the  first  Punic  war, 
raised  two  ounces  of  copper  to  the  same  denomination  as 
they  previously  expressed  by  their  legal  standard  of  twelve 
ounces,  thus  enabling  that  republic  to  pay  its  great  debts 
with  one-sixth  of  the  real  amount.  So  much  embarrassed 
and  burdened  with  debt  were  the  masses  of  the  citizens, 
that  the  change  was  popular.  It  is  the  first  step  that  is 
dangerous.  As  with  our  first  issue  of  paper  money,  it  led 
to  a  second  and  a  third.  During  the  next  Punic  war  the 
same  coin  was  reduced  from  two  ounces  to  one,  and  after- 
ward to  half  an  ounce,  being  only  twenty -fourth  part  of 
its  original  value,  or  little  more  than  four  cents  on  the 
dollar,  estimated  in  the  money  of  the  United  States.  In 
the  reigns  of  Henry  VIII.  and  Edward  the  VI.  in  England, 
and  in  Scotland  also  during  the  minority  of  James  VI.,  a 
fraudulent  adulteration  of  the  national  coin  was  practised. 

The  Secretary  of  the  Treasury  recommends  the  reduc- 
tion of  the  value  of  the  five-dollar  gold  piece  to  that  of 
the  British  %  sovereign,  or  about  $4.84,  the  usual  price  of 
that  coin  in  New  York.  This  carried  into  our  other 
national  coins  would  lower  the  permanent  value  of  the 
currency  by  rather  more  than  three  per  cent.,  and  is  to 
that  extent  an  injury  to  the  public  creditor,  and  an  arbi- 
trary and  unjust  invasion  upon  the  transactions  of  pri- 
vate or  personal  business.  .But  this  is  insignificant  in 
comparison  with  the  depreciation  which  has  already  in- 
flicted a  lasting  stigma  upon  the  public  honor,  under  the 
name  or  guise  of  paper  dollars  or  legal  tender,  now  al- 
ready at  a  discount  of  forty -seven  per  cent.  I  prefer  a 
frank  and  open  depreciation  to  an  evasive  system  which 
"keeps  the  promise  to  the  ear,  and  breaks  it  to  the 


sense." 


It  is  in  vain  to  affirm  that  gold  has  risen,  but  that 
paper  money  has  not  fallen.  The  man  who  is  in  a  sink- 
ing boat  might  as  well  say  that  the  water  is  rising,  and 
that  his  boat  is  stationary.  Let  him,  if  he  is  not  out  of 
sight  of  land,  not  yet  engulfed  above  his  eyes,  look  at 


FINANCIAL   CONDITION   OF   THE   NATION.       197 

1  ie  shore  while  he  can,  and  see  whether  the  water  is 
1  coding  its  banks.  The  markets  of  the  world,  where 
A  re  sell  our  products  and  buy  many  articles  in  return, 
;  re  the  true  landmarks  as  to  the  value  of  our  currency ; 
;  nd  they  are  and  must  be,  as  I  have  already  shown,  faith- 
juliy  indicated  by  the  rise  and  fall  of  the  precious 
]  ietals. 

II  am  opposed  to  all  these  schemes  for  pretended  pay- 
aent.  One  law  practically  prevails  with  regard  to  na- 
ioual  bonds  when  they  amount  to  millions,  and  another 
,s  to  indigent  creditors.  Our  honor  is  implicated  in  the 
aithful  performance  of  all  our  contracts;  but  if  any 
listinction  must  be  made,  it  is  far  more  deeply  concerned 


n  paying  to  the  utmost  fraction  the  wages  of  the  soldier, 
h* 


vho  has  won  them  on  the  field  by  his  sweat  and  blood, 
he  peril  of  his  life  and  limb,  than  by  paying  the  richer 
;reditor  in  coin,  and  depriving  our  faithful  defenders  of 
learly  one-half  of  their  well-deserved  earnings. 

If,  by  our  enactments,  we  have  made  less  than  sixty 
;ents  of  hard  money  already  pass  for  one  dollar,  on  what 
principle  are  we  debarred  from  going  farther  in  the  same 
lirection  ?  There  are  men  who  cannot  perceive  the  im- 
portance of  truth  and  integrity  until  they  themselves 
.ndividually  feel  substantial  retribution  for  their  offences, 
ind  the  results  of  their  rash  and  headlong  policy  are 
fully  accomplished.  The  prudent  capitalists  who  are 
1 1  ready,  to  a  very  considerable  extent,  seeking  other  in- 
vestments in  preference  to  national  stocks,  ask — and  let 
those  who  initiated  this  policy  answer  this  question  if 
they  can — why,  if  we  have  already  reduced  our  debt 
from  one  hundred  to  less  than  sixty  cents  on  the  dollar 
in  hard  money,  we  may  not  reduce  it  to  fifty  cents,  or 
any  other  amount  that  we  choose;  and  why,  if  we  thus 
treat  the  poor,  who  are  many,  and  for  the  time  being  are 
uninfluential  and  forgotten,  we  may  not  in  process  of  time 
pay  the  fewer  and  richer  creditors  in  a  legal  tender  yet 
more  debased  or  depreciated.  The  confidence  of  the 
>eople  in  the  Government  itself  decreases,  and  the  facili- 
ies  for  negotiating  loans  are  diminished.  I  prefer  an 
i v<»\ved  confession  of  the  financial  weakness  of  the 
[  i.  .isury  to  a  course  like  this,  pernicious  in  itself  and 


198       FINANCIAL   CONDITION   OF   THE   NATION. 

already  made  palpably  plain  to  every  public  creditor  and 
to  every  man  throughout  the  country  who  pays  the  com- 
mon expenses  of  maintaining  himself,  and  is  not  blinded 
by  the  bigotry  of  party  spirit. 

I  have  heard,  and  with  pain,  the  honorable  member 
who  occupies  the  position  of  chairman  of  the  Committee 
of  Ways  and  Means  express  in  this  House  views  still 
more  at  variance  than  those  of  the  Secretary  of  the 
Treasury  with  the  principles  of  sound  finance  and  states- 
manship. He  advocates  the  adoption  of  a  circulation  of 
paper  money  amounting  to  $600,000,000 ;  and  in  face  of 
the  inflation  of  prices,  which  he  recognizes,  says  that  this 
amount  is  required  by  the  business  of  the  country. 

On  the  1st  day  of  January,  1857,  the  circulation  of  all 
the  banks  of  the  United  States,  including  those  now  in 
rebellion,  was  $214,778,822,  a  larger  amount  than  it  ever 
before  attained.  But  the  expansion  of  the  currency, 
followed  by  the  commercial  crisis  and  numerous  failures  of 
that  year,  gave  us  a  circulation  only  a  little  more  than 
the  third  of  the  paper  now  proposed.  As  the  expansion 
of  1857  was  followed  by  the  commercial  disasters  of  the 
same  year,  so  also  the  increase  of  paper  money  in  1837, 
when,  on  the  1st  day  of  January,  it  was  $149,185,890,  or 
about  $50,000,000  more  than  $94,389,570,  its  amount  on 
January  1, 1834,  was  followed  by  the  widespread  and 
well-remembered  disasters  of  1837. 

I  have  named  these  sums  thus  minutely  because  we 
are  now  accustomed  to  talk  so  thoughtlessly  of  more 
enormous  amounts  than  were  ever  before  in  the  same 
length  of  time  spent  by  any  nation,  that  we  are  apt  to 
forget  the  real  magnitude  of  the  questions  we  discuss. 
The  addition  to  the  national  debt  of  Great  Britain  by 
the  Crimean  war  is  stated  to  have  been  $200,000,000  ; 
and  the  whole  amount  expended  by  the  same  country  in 
vain  efforts  to  retain  the  United  States  as  colonies  was 
less  than  $675,000,000,  while  at  the  present  time  the 
aggregate  we  are  required  to  raise  for  the  appropriations 
of  the  next  eighteen  months  is  $1,646,634,315.  But  the 
chief  lesson  taught  by  the  disasters  of  1837  and  1857  is 
the  inseparable  connection  between  all  violent  and  sudden 
expansions  of  the  circulating  medium  with  feverish, 


FINJ 


FINANCIAL   CONDITION   OF   THE   NATION.       199 

<  ager,  and  undue  speculation,  succeeded  by  an  invariable 

<  ebility  and  collapse  of  the  commercial  system.     This  is 
]  Jstorically  true ;  and  no  unusual  knowledge  of  human 
i  .ature  is  needed  to  trace  the  relation  of  cause  and  effect 
1  Between  the  two  events.    Debtors  are  easily  emancipated 

roni  their  engagements.     Owners  of  real  and  personal 

>roperty  are  alike,  for  a  time,  elated  by  the  nominally 

•  extravagant  prices  they  obtain.     No  two  epochs  can  be 

>recisely   alike,  and   thus   the  lessons  of  the  past  are 

.purned   in  the   passion   of   the   present   moment.     All 

i  as  ten  to  make  new  investments,  and  the  bubble  grows 

arger.    Nearly  all  admit  the  approach  of  the  impending 

itorm,  but  fancy  themselves  too  wise  or  too  dexterous  to 

)v  involved  in  the  ruin  which  they  see  must  soon  overtake 

:he  community. 

The  policy  supported  by  the  honorable  member  has  set 
die  ball  in  motion.  He  now  proposes  to  "  protect  the 
people  "  from  what  he  terms  u  their  own  eager  specula- 
tions," by  increasing  the  size  and  accelerating  the  speed  of 
the  avalanche  he  has  started ;  and  he  complacently  de- 
clares, to  use  his  own  words,  that  when  "  their  unregula- 
ted enterprise,"  which  has  been  deprived  of  its  natural 
and  salutary  checks  by  the  system  of  legal  tender,  "  has 
brought  them  to  general  bankruptcy,"  he  "shall  have  the 
satisfaction  of  knowing  that  he  attempted  to  prevent  it." 
The  "  handwriting  on  the  wall,"  foretelling  the  ruinous 
condition  to  which  the  financial  policy  or  the  Administra- 
tion is  bringing  us,  is  everywhere  visible,  and  he  who 
runs  may  read  it. 

I  will  not  do  so  much  injustice  to  the  intelligence  of 
those  gentlemen  whose  counsels  have  ruled  in  the  affairs 
of  the  nation  as  to  intimate  that  their  own  judgment,  apart 
from  extraneous  political  causes,  approved  of  the  course 
they  have  pursued.  Considered  as  questions  of  revenue 
and  finance  alone,  they  must  long  ago  have  regretted,  as 
they  will  ever  in  the  future  deplore,  their  long-continued 
procrastination,  their  timid  delay  in  measures  of  taxation 
and  finance,  resulting  at  last  in  a  determination  to  rush 
through  Congress,  with  hot  and  desperate  haste,  the  en- 
actment of  fictitious  currency  upon  a  plea  of  the  immedi- 
ate and  pressing  necessity  which  the  accumulated  evils 


200       FINANCIAL   CONDITION   OF   THE   NATION. 

of  long-continued  errors  have  created.  They  hoped,  by 
"  making  money  abundant,"  and  depreciating  its  value,  to 
make  men  invest  in  national  stocks.  The  notes  of  an  in- 
dividual are  in  good  esteem  when  he  is  chary  of  his  credit 
and  uses  it  seldom ;  when  he  issues  them  in  unlimited 
number,  people  become  suspicious.  In  the  same  way  the 
immense  issues  of  paper  money,  injuring  the  credit  of  the 
Government,  have  tended  to  prevent  capitalists,  who  are 
proverbially  timid,  from  purchasing  Government  securi- 
ties. The  same  rules  apply  to  individuals  and  nations 
alike ;  and  yet  the  gentlemen  to  whom  I  refer  would 
spurn  in  their  personal  affairs  the  plan  they  have  forced 
upon  the  country,  of  enlarging  purchases  and  thus  driv- 
ing creditors  into  a  compromise.  There  is  no  real  dis- 
tinction between  the  two  cases. 

If  those  who  are  now  in  power  had  applied  to  the 
affairs  of  state  the  sound  principles  of  common  sense 
they  know  to  be  correct  in  private  life,  the  nation  would 
have  been  safe ;  but,  bewildered  by  the  magnitude  of  the 
subject,  and  intoxicated  by  the  possession  of  new-born 
power,  they  rushed  into  financial  schemes  at  which  the 
the  world  wonders.  Who  does  not  know  that  when  the 
debts  of  an  individual  are  overdue,  and  he  refuses  to  pay 
them  except  by  giving  his  notes,  and  persists  indefinitely 
upon  this  method  of  transacting  business,  his  creditors 
take  whatever  they  can  get  in  ready  pay,  rather  than  his 
bonds  at  long  date  ?  Yet,  considering  the  boundless  re- 
sources of  the  nation,  and  the  large  sums  accumulated  by 
favorites  of  the  Government,  the  public  may  be  surprised 
to  learn  that  the  plan  should  have  failed  so  signally  as 
was  stated  by  my  honorable  colleague  who  addressed  the 
House  on  Monday.  He  told  us  that — 

"  The  Secretary  has  paid  out  nearly  $250,000,000  legal  tender 
notes,  being  all  that  he  was  authorized  to  issue ;  and  notwith- 
standing he  has  had  authority  for  the  last  ten  months  to  sell 
$500,000,000  of  five-twenty-six  per  cent,  bonds  at  the  market 
price,  he  has  only  disposed  of  about  $25,000,000  and  has  still  au- 
thority to  sell  $475,000,000  at  the  market  price,  and  take  his  pay 
for  them  in  legal  tender  notes." 

We  have  arrived  at  this  stage  of  embarrassment.  Money 
has  been  made  as  "  abundant "  as  the  advocates  of  the 


FINANCIAL   CONDITION   OF   THE   NATION.        201 

jcheme  asked,  but  men  are  daily  buying  real  estate  and 
personal  property  of  nearly  all  kinds  in  preference  to  na- 
tional securities  at  the  proposed  rate  of  interest.  Many 
3f  those  who  have  already  invested  in  national  stocks, 
are  anxious  to  sell  them  and  prefer  holding  other  property. 
Nearly  all  kinds  of  bond  and  share  securities  have  risen 
in  price,  following  the  course  of  gold,  with  the  ominous 
and  prominent  exception  of  Treasury  paper  and  Govern- 
ment stocks,  which  are  sold  lower  for  "  legal  tender  "  than 
when  gold  was  at  a  premium  of  one  hundred  and  thirty 
or  one  hundred  and  thirty-two  per  cent.  Yet  those  whose 
errors  have  brought  this  trouble  upon  us  hold  the  poisoned 
chalice  to  our  lips,  and  ask  the  nation  to  drink  its  con- 
tents to  the  dregs. 

The  Administration,  having  in  its  control  the  vast  re- 
sources of  the  property  and  credit  of  the  United  States, 
possessed  ample  power  to  maintain  public  confidence  and 
raise  all  needful  sums,  if,  instead  of  authorizing  the  first 
issue  of  Treasury  notes,  it  had  boldly  entered  the  money 
market,  and  adopted  prompt  measures  of  taxation,  which, 
however  odious,  would  have  been  cheerfully  borne  in  the 
hope  of  vindicating  the  great  principle  of  self-government 
by  the  people.  Unfortunately  there  has  been  a  grave 
and  important  departure  from  this  financial  course,  in- 
volving a  loss  of  unity  of  opinion  as  to  the  best  means  of 
terminating  honorably  the  present  fratricidal  war  between 
the  two  sections  of  our  country.  In  avoiding  taxation 
until  it  could  not  be  deferred  longer,  and  in  producing 
that  hopeful  excitement  which  is  always  caused  by  a  large 
increase  of  the  currency,  they  avoided  much  that  would 
have  brought  calm  reflection  to  the  public  mind.  Nearly 
a  year  ago  I  introduced  a  motion  in  favor  of  providing 
Congress  and  the  country  with  more  frequent  statements 
of  the  receipts  and  disbursements  of  the  Government, 
hopiiiLT  thus  early  to  arouse  the  nation  to  a  sense  of  its 
impending  danger  ;  but  the  resolution  yet  slumbers  in  the 
Treasury  without  response.  The  effects  of  those  who 
were  inte rested  in  the  expenditure  of  the  public  money 
were  not  counterbalanced  by  the  exertions  of  those  from 
whom  the  public  taxation  must  be  collected.  Fuel  was 
thus  added  to  the  flame  of  popular  excitement,  producing 


202       FINANCIAL   CONDITION   OF   THE   NATION. 

results  favorable  to  the  opinions  of  those  who  were  de- 
sirous of  interfering  with  the  local  institutions  of  the 
South,  and  were  unwilling  to  trust  the  great  and  difficult 
problem  of  the  races  to  the  gradual  and  ameliorating  in- 
fluences of  time,  by  which  Providence  works  out  its'  benefi- 
cent changes  without  injury  to  mankind.  In  vain  did  the 
President,  in  his  first  message,  tender  advice  in  the  words 
he  has  lately  reiterated  : 

"  Suppose  you  go  to  war,  you  cannot  fight  always ;  and  when, 
after  much  loss  on  both  sides,  and  no  gain  on  either,  you  cease 
fighting,  the  identical  old  questions,  as  to  terms  of  intercourse,  are 
again  upon  you." 

The  party  by  which  he  was  chiefly  supported  raised 
new  and  unnecessary  questions,  making  the  war  entirely 
one  for  the  triumph  of  conquest  and  of  arms,  or — as  some 
have  even  gone  so  far  in  this  House  as  to  assert — of  ex- 
termination. We  reap  a  plentiful  harvest  of  debt,  deso- 
lation, and  death  from  the  seed  they  have  sown.  I  do 
not  envy  them  the  temporary  popularity  and  fading 
laurels  thus  won  by  the  sufferings  of  our  country.  The 
history  of  these  financiers  will  be  like  that  of  John  Law, 
the  celebrated  banker,  who  once  wielded  the  chief  power 
in  France.  Says  M.  Thiers  : 

"  His  fate  was  that  which  may  be  supposed  to  have  overtaken 
the  first  adventurous  boatman  who  rowed  from  Lake  Erie  to  On- 
tario. Broad  and  smooth  was  the  river  on  which  he  embarked ; 
rapid  and  pleasant  was  his  progress ;  and  who  was  to  stay  him 
in  his  career?  Alas,  for  him!  The  cataract  was  nigh.  He  saw, 
when  it  was  too  late,  that  the  tide  which  wafted  him  so  joyously 
along  was  the  tide  of  destruction  ;  and  when  he  endeavored  to 
retrace  his  way,  lie  found  that  the  current  was  too  strong  for  his 
weak  efforts  to  stem,  and  that  he  drew  nearer  every  instant  to  the 
tremendous  falls.  Down  he  went  over  the  sharp  rocks,  and  the 
waters  with  him.  He  was  dashed  to  pieces  with  his  bark  ;  but  the 
waters,  maddened  and  turned  to  foam  by  the  rough  descent,  only 
boiled  and  bubbled  for  a  time,  .and  then  flowed  on  again  as 
smoothly  as  ever.1' 

While  my  chief  object  at  present  is  to  enter  nay  earnest 
remonstrance  against  an  increase  of  legal  tender  paper, 


FINANCIAL   CONDITION   OF   THE   NATION.        203 

ind  ask  attention  to  the  importance  and  necessity  of  ar- 
•esting  the  inflation  which  is  now  going  on  so  rapidly,  it 
v\ -mild  be  unjust  to  refrain  from  reference  to  the  measures 
>f  relief  which  are  demanded  by  the  exigencies  of  the 
30tintry. 

My  earnest  desire  is  and  always  has  been,  to  furnish 
the  Government  with  every  resource  and  power  necessary 
to  the  repression  of  the  rebellion.  From  my  solicitude 
for  the  re-establishment  of  the  Republic,  I  desire  to  avert 
any  increase  of  such  paper  money  as  is  now  in  use,  know- 
ing how  injuriously  it  affects  public  confidence,  enlarges 
expenditures  by  raising  prices,  lulls  the  public  mind  into 
a  sense  of  false  security,  and  lessens  the  vigilance  which 
prevents  fraud. 

It  seems  to  me  that  the  countiy  requires  rather  less 
than  more  of  the  circulating  medium ;  and  yet  the  attempt 
to  enforce  a  speedy  reduction  either  by  immediate  re- 
sumption of  specie  payments,  or  by  legislative  enactments 
for  the  restriction  of  bank  credit,  would  produce  serious 
disasters.  Taxation  of  the  banks  will,  I  believe,  tend  to 
throw  upon  the  market  the  State  stocks  and  mortgages 
held  by  them  as  a  basis  for  circulation — pressing  hard 
upon  the  credit  of  States  and  individuals,  leading  to  the 
withdrawal  of  banking  capital,  and  curtailing  the  usual 
accommodations  to  manufacturing  and  commercial  inter- 
ests throughout  the  country. 

Gentlemen  for  whom  I  entertain  much  respect  are  de- 
sirous of  substituting  the  legal  tender  of  the  United  States 
for  tin-  bank  notes  of  the  States  individually,  and  think 
they  have  found  a  cure  for  our  financial  troubles.  The 
whole  paper  circulation  of  the  loyal  States,  as  computed 
by  my  honorable  colleague,  is  $166,600,000 — a  trifle  in 
comparison  with  $1,646,634,315.15,  the  amount  we  are 
called  upon  to  raise  for  the  next  eighteen  months.  We 
an-  a>ke<l  to  derange  our  commercial  and  industrial  sys- 
tems throughout  the  whole  country  and  submit  our  State 
i nst  it  ut  ions  to  a  central  authority,  and  vet  the  burden  will 
remain,  practically,  almost  undiminished.  The  whole 
circulation  <>t  the  loyal  States  is  only  about  one-tenth  of 
$1,646,684,815,15,  the  minimum  amount  now  computed 
to  be  necessary  for  the  maintenance  of  our  credit  and  our 


204       FINANCIAL   CONDITION    OF   THE  NATION. 

Army  and  Navy  for  the  next  year  and  a  half.  I  regret 
the  rejection  of  advice  heretofore  tendered  to  the  Gov- 
ernment, to  issue  small  notes  bearing  interest,  so  as  to 
prevent  their  becoming  current  money.  Interest  has  been 
saved,  but  at  the  cost  of  increased  outlay  and  disaster. 
These  notes,  made  payable  in  long  loans,  would  not  have 
had  much  influence  on  prices.  More  reliance  should  have 
been  placed,  and  might  yet  be  placed,  upon  the  sale  of 
public  stocks  at  seven  and  three-tenths,  or,  at  least,  a 
higher  rate  than  six  per  cent.,  in  every  favorable  state  of 
the  money  market.  It  is  a  problem  difficult  of  solution 
whether  it  will  be  better  for  the  Government  to  raise 
money  temporarily  by  establishing  a  system  of  deposits 
in  New  York,  by  selling  seven  and  three-tenths  bonds  on 
short  time,  or  by  what  other  means,  except  those  of  legal 
tenders,  which  we  have  already  tried  and  found  ruinous. 
In  my  opinion,  Government  might  yet  by  these  plans 
steadily  absorb  much  of  the  available  capital  of  the  coun- 
try, without  the  sacrifices  involved  in  a  continuation  of 
the  legal  tender  issues ;  but  the  case  is  full  of  the  utmost 
danger  to  the  nation.  It  presents  the  most  solemn  re- 
sponsibilities for  the  Secretary  of  the  Treasury,  and  I 
should  yet  rejoice  to  see  a  commission  appointed  to  inquire, 
with  his  co-operation,  into  the  best  method  of  arranging 
our  financial  affairs.  It  would  be  a  part  of  the  duty  of 
such  commissioners  to  call  before  them,  without  any  dif- 
ference of  party,  the  most  wise  and  distinguished  bankers, 
and  commercial  men  of  extended  experience,  thus  avoid- 
ing the  odium  and  partialities  wrhich  it  is  difficult  to 
separate  from  private  conferences. 


THE    FINANCIAL    PROBLEM. 
HOW  SHALL  IT  BE   SOLVED? 


HOUSE  OP  REPRESENTATIVES,  January  29,  1876. 


At  the  date  of  this  speech  the  fallacy  of  a  belief  in  the  reality 
of  prosperity  produced  by  the  war  and  an  inflation  of  the  cur- 
rency had  been  demonstrated  by  practical  tests,  but  the  shrink- 
age of  values  and  the  pressure  of  ill-considered  taxation  had 
produced  general  embarrassment  or  distress  for  which  a  new  ex- 
pansion of  "  legal  tender  "  was  hailed  by  many  as  a  panacea. 
To  give  useful  warnings  against  this  error  the  monetary  ex- 
perience of  the  United  States  and  other  nations,  so  far  as  it  bears 
upon  the  subject  is  recapitulated,  aiid  a  method  is  propounded 
for  returning  to  specie  payments  by  steps  so  gradual  that  Congress 
would  have  no  excuse  for  again  interfering,  confidence  would  re- 
turn and  prosperity  prevail. 

MR.  SPEAKER  :  The  present  embarrassment  of  our  finan- 
cial and  commercial  interests  demands  serious  and  pro- 
found attention.  Its  effects  are  felt  by  the  people  of  all 
pursuits  in  every  part  of  the  Union,  and,  without  distinc- 
tion of  party,  they  imperatively  require  the  application 
of  the  best  attainable  remedy.  Capital  lies  idle  in  the 
vaults  of  the  banks,  and  has  been  offered  at  lower  rates 
of  interest  than  at  any  other  period  in  the  history  of  this 
continent.  The  number  of  business  failures  in  the  year 
just  closed  was  seventy-seven  hundred  and  forty,  larger 
than  in  any  previous  year.  In  1874  the  number  exceed- 
ed that  in  1873,  and  so  on,  with  one  exception,  when  it 
stationary,  the  failures  have  gone  on  increasing  every 
year  since  1862.  Multitudes  of  men  and  women,  to  an 
extent  hitherto  unparalleled,  are  presenting  that  "sad- 
dest sight  on  earth  "  of  being  able  and  anxious  to  work, 
but  unable  to  find  the  work  to  do. 


206  THE   FINANCIAL   PROBLEM. 

f 

To  understand  the  nature  of  the  disease  which  is  now 
preying  on  the  vitals  of  the  country,  we  must  refer  to  its 
origin  and  trace  its  insidious  progress,  reviewing  the  fi- 
nancial history  of  the  war  impartially  and  in  the  light 
now  thrown  upon  it  by  the  decisive  lessons  of  the  past. 

The  rebellion  was  precipitated  on  the  country  unex- 
pectedly to  the  party  in  power,  who  were  slow  and  un- 
willing to  comprehend  its  real  magnitude.  The  repeated 
prophecies  of  leading  statesmen,  that  it  would  succumb 
in  a  few  weeks,  are  yet  fresh  in  our  memories,  and  will 
never  fail  to  arrest  the  attention  of  all  students  of  our 
history.  As  the  nature  of  the  impending  dangers  was 
not  understood,  neither  the  military  nor  pecuniary  meas- 
ures needed  to  meet  them  were  promptly  undertaken. 
The  antiquated  and  exploded  financial  theories  of  obso- 
lete European  statesmen  and  of  our  own  in  former  days 
were  again  put  into  practice  and  once  more  proved  to  be 
erroneous.  Those  who  gave  more  far-seeing  counsels 
were  fortunate  if  they  escaped  opprobrium.  While  the 
North  believed  that  the  crisis  would  rapidly  pass  over, 
the  South  mistakenly  supposed  the  North  would  yield  to 
its  demands.  The  battle  of  Bull  Run,  when  the  capital 
itself  was  endangered,  in  part  dissolved  the  illusion  on 
both  sides ;  but  the  financial  errors  which  had  taken  root 
were  destined  to  be  worked  out  to  their  logical  results, 
which  have  now  swept  over  the  country  and  can  only 
slowly  be  overcome. 

The  policy  of  deluding  by  makeshift  expedients,  in- 
stead of  following  the  standard  of  the  real  and  perma- 
nent good  of  the  public  as  fixed  by  immutable  natural 
laws,  was  too  conducive  to  the  personal  and  partisan  in- 
terests of  those  in  power  to  be  readily  abandoned.  At 
an  extra  session  of  Congress,  in  July,  1861,  it  was  simply 
indicated  that,  in  view  of  the  expected  brief  duration  of 
the  war,  the  Government  would  make  a  loan  of  a  hundred 
and  fifty  millions  in  gold  from  the  banks  of  New  York, 
Boston,  and  Philadelphia.  Before  the  17th  of  November, 
in  the  same  year,  they  had  actually  advanced  one  hun- 
dred and  forty-six  millions  in  this  form,  and  their  system 
was  so  strong  that  after  the  last  part  of  the  loan  had 
been  nearly  or  quite  paid,  the  gold  and  silver  in  the 


THE   FINANCIAL   PROBLEM.  207 

1  >anks,  which  had  at  the  beginning  been  less  than  fifty 
uillions,  was  forty -two  millions.  The  specie  for  a  long 
ime  returned  to  the  banks  in  the  ordinary  course  of  busi- 
less.  The  Treasury  continued  to  demand  "  thirty  mil- 
ions  a  month,"  and  insisted  that  this  should  be  paid  only 
n  coin.  The  banks  yet  had  more  than  sufficient  specie 
:or  the  transaction  of  their  own  business,  but  further 
steps  were  taken  to  destroy  the  State  banks. 

The  Government,  which  should  have  guarded  the  banks 
2aref ully,  so  that  they  might  have  kept  up  the  value  of 
the  currency  by  a  knowledge  of  their  strength,  scattered 
the  gold,  and  it  could  neither  be  lent  over  again  in  suffi- 
cient quantities  or  made  available  as  a  reserve  for  the 
banks.  Suspension  followed  on  the  31st  of  December, 
soon  after  the  meeting  of  Congress  at  its  next  regular 
session. 

Even  in  the  beginning  of  January,  1862,  specie  and 
paper  money  remained  of  equal  value.  At  that  date  due 
sagacity  and  prudence  would  have  prompted  the  instant 
adoption  of  a  system  of  adequate  taxation  and  other  well 
considered  and  suitable  measures  of  providing  for  the  ex- 
penditures of  the  war.  The  Government,  having  by  its, 
own  action  forced  the  banks  into  suspension,  authorized, 
on  the  2oth  of  February,  1862,  a  large  issue  of  "legal 
tender,"  receivable  "for  all  debts  except  duties  on  im- 
ports and  interest  on  the  public  debt."  In  those  notes 
the  distinction  was,  for  the  first  time  in  history,  made  by 
a  government  between  specie  and  its  own  paper.  Thus 
the  door  was  opened  wide  to  the  enormous  over-issue  of 
paper  money,  which  led  to  the  inflation  of  prices,  and  but 
for  our  natural  wealth  and  strongly  national  spirit  would 
have  been  fatal  to  the  Government  and  immediately  dis- 
a-t  roiis  to  the  business  of  the  people.  It  was  deemed 
more  creditable  to  create  fictitious  and  exaggerated  prices 
of  labor  and  commodities  and  an  artificial  appearance  of 
prosperity,  than  to  enforce  prompt  taxation. 

The  Administration  having  created  an  unfailing  de- 
mand lor  Lfold,  and  fanned  the  fire  of  speculation  by  the 
term-;  of  the  original  notes  which  were  exchangeable  for 
United  States  <;  prr  cent,  bonds,  withdrew  even  this  right 
of  redemption  after  July  1,  1863,  and  more  anxious  to 


208  THE   FINANCIAL   PROBLEM. 

produce  a  seemingly  low  interest  than  to  protect  the  peo- 
ple against  an  actual  depreciation  of  the  national  securi- 
ties, which  reached  the  low  rate  of  thirty-five  cents  on 
the  dollar,  made  an  inglorious  and  suicidal  effort  to  raise 
loans  at  5  per  cent.  The  continuance  of  the  right  to  ex- 
change the  "  legal-tender  notes  "  for  6  per  cent,  bonds 
might  have  effectually  prevented  the  currency  from  be- 
coming redundant,  and  it  might  have  been  continually 
checked  by  investments  in  the  bonds  for  the  sake  of 
interest.  The  6  per  cent,  bonds  were  sold  at  the  rate  of 
$1,500,000  to  $2,000,000  a  day — amounts  nearly  equal  to 
the  daily  expenses  of  the  Government.  Of  the  loan  at 
the  lower  rate,  little  was  taken  except  by  bankers,  who 
used  the  bonds  in  the  organization  of  national  banks. 
The  funding  was  substantially  arrested  for  several  months. 
Many  times  the  sum  of  the  interest  sought  to  be  saved 
were  lost  in  the  enhanced  rates  of  purchase  for  the  Army 
and  Navy,  and,  under  a  needlessly  inflated  currency,  a 
war  debt  of  over  $2,800,000,000  was  incurred,  although 
the  value  received,  reckoned  in  gold,  was  probably  not 
more  than  forty  cents  on  the  dollar  on  all  the  expenditures 
of  the  war. 

The  currency  continued  to  be  further  inflated,  without 
any  provision  for  converting  it  into  interest-bearing  bonds, 
until,  by  the  30th  of  June,  18(>i,  the  natural  fruits  of  the 
mistaken  policy  became  palpable  to  its  advocates.  The 
currency  and  other  temporary  loans  amounted  to  over 
$1,125,877,034. 

The  Administration  having  created  a  market  for  gold, 
with  a  constant  supply  and  demand,  through  paying 
interest  on  bonds  in  gold  and  refusing  to  receive  its  own 
notes  in  payment  of  duties  on  imports,  the  congressional 
majority,  by  joint  resolution,  increased  the  previously  ex- 
travagant duties  to  the  amount  of  50  per  cent,  on  all  ar- 
ticles indiscriminately  for  sixty-three  days,  ending  with 
the  30th  of  June,  1864.  The  necessary  consequence  was 
that  gold  rose  rapidly  and  enormously,  or  rather  that  the 
currency  correspondingly  depreciated.  Congress,  alarm- 
ed and  anxious  to  stem  the  tide  it  had  thus  set  in  motion, 
passed  a  "gold  bill,"  approved  June  17,  1864,  with  the 
vain  hope  of  checking  the  depreciation  of  the  currency 


THE   FINANCIAL   PROBLEM.  209 

>y  prohibiting  time  contracts  for  the  sale  of  gold.  Vio- 
ations  of  the  act  were  to  be  punished  by  fines  and  im- 
n-isonment.  The  ill-advised  step  only  added  fuel  to  the 
lame.  Its  result  was  a  temporary  closing  of  the  gold- 
•oom,  leaving  purchasers  at  the  mercy  of  individual 
lealers,  and,  next,  a  mania  of  speculation,  during  which 
^old  reached  its  maximum  of  285,  the  actual  premium 
laving  more  than  doubled  within  about  two  months. 
The  pernicious  effects  of  these  glaring  violations  of  the 
aws  of  common  sense  and  political  economy  were  so  im- 
nediately  obvious  that  both  acts  were  short-lived,  the 
'  gold  bill  "  being  repealed  in  fifteen  days  after  its  pas- 
sage. 

The  protracted  duration  of  the  war,  so  widely  at  vari- 
ince  from  the  early  and  rose-colored  assurances  of  the 
administration,  added  to  the  excessive  issue  of  paper 
money  and  its  great  depreciation,  induced  distrust  and 
discredit  of  the  Union.  Instead  of  wantonly  diluting 
the  currency  and  wilfully  diminishing  its  value,  so  as  to 
tempt  purchasers  of  bonds,  or,  in  the  phraseology  of  the 
day,  to  u  float  the  debt "  nominally  at  par,  but  really  far 
below  it,  a  strong  specie  reserve  should  have  been  main- 
tained, and  the  paper  dollar  kept  as  nearly  as  possible  at 
its  par  value.  This  would  have  given  confidence,  and  the 
people  or  Government  would  have  received  a  full  or  fair 
equivalent  for  the  money  they  are  compelled  to  pay. 
Throughout  her  recent  great  calamities  France,  in  pur- 
suance of  a  policy  well  worthy  of  profound  attention, 
never  permitted  her  currency  to  reach  a  discount  of  over 
2J  per  cent.,  and  yet  one  dollar  of  hard  money  would 
have  bought  nearly  three  dollars  of  ours,  and  our  bonds 
were  depreciated  to  a  corresponding  extent.  No  other 
nation  has  ever,  during  war  or  any  other  great  exigency, 
made  such  distinctions,  discrediting  her  own  currency  by 
persistently  recognizing  and  enacting  its  inferiority  to  the 
precious  metals. 

It  is  little  to  the  credit  of  the  party  which  for  the  last 
fifteen  years  has  been  intrusted  with  the  management  of 
our  financial  affairs  that,  although  France  maintained 
her  paper  money  practically  at  par  during  the  misfor- 
L~nes  which  ended  in  a  loss  of  some  of  her  best  territory, 
14 


210  THE   FINANCIAL   PROBLEM. 

throughout  a  terrific  civil  war,  and  although  she  paid  a 
ransom  of  $1,000,000,000  and  interest,  our  "  legal-tender," 
or  Government  paper  money,  is  yet  at  a  discount,  varying 
from  12  to  13  per  cent.,  and  gold  once  reached  a  premium 
of  at  least  185.  The  public  debt  of  France  is  more  than 
twice  as  large  as  our  own.  Her  area  is  more  than  one- 
third  less  than  that  of  the  State  of  Texas  alone  and  only 
about  one-twentieth  part  of  that  of  the  Union.  Her 
population,  long  nearly  stationary,  and  recently  dimin- 
ished, was,  in  1872,  little  more  than  thirty-six  millions, 
while  ours  is  now  about  forty-three  millions,  and  is  prob- 
ably increasing  at  the  rate  of  nearly  a  million  and  a  half 
yearly.  Judging  from  the  past,  our  national  wealth  will 
double  in  about  eight  years,  a  rate  of  prosperity  three  or 
four  times  greater  than  that  of  France.  Yet,  with  her 
far  inferior  resources,  and  throughout  the  pressure  of 
almost  unequalled  misfortunes,  the  outstanding  issues  of 
the  Bank  of  France  not  redeemable  in  specie  never  ex- 
ceeded $640,000,000,  and  were  lately  $489,000,000, 
against  which  it  holds  $300,000,000  in  the  precious 
metals,  but  insists,  as  a  preliminary  to  the  resumption  of 
.specie  payments  on  the  1st  of  January,  1878,  on  a  further 
reduction  to  the  amount  of  nearly  a  hundred  millions  of 
the  issues  lent  to  the  government. 

Our  basis  of  credit  being,  as  we  have  seen,  far  superior 
to  that  of  France,  the  contrast  between  her  financial  man- 
agement and  that  of  the  administration  of  this  country, 
deeply  condemns  the  latter.  Acting  without  forethought, 
and  in  one  of  those  blunders  which  are  sometimes  said 
truly  to  be  worse  than  crimes,  it  borrowed  and  dissipated 
the  specie  held  by  the  banks,  and  paid  away  its  own,  in- 
stead of  encouraging  and  keeping  a  reserve,  which  would 
have  made  the  currency  nearly  at  a  par  with  coin,  and 
thus  have  retained,  at  nearly  the  same  standard,  the  cur- 
rent value  of  its  bonds  and  the  articles  needed -in  the  war, 
enormously  diminishing  the  burdens  of  the  people,  who, 
through  the  shameless  waste  of  their  credit,  now  pay,  in 
the  common  standard  of  the  world,  debts  contracted  un- 
der the  fictitious  valuations  of  an  irredeemable  currency, 
which  the  administration,  by  its  example  and  its  laws, 
taught  the  people  and  the  world  to  distrust. 


THE   FINANCIAL   PROBLEM.  211 

Our  Government  took  no  efficient  or  well-calculated 

s  eps  to  keep  up  the  value  of  our  note  circulation.     But 

t  lis  object  was  the  first  aim  of  France.     Our  administra- 

t  on  fed  speculation,  wilfully  producing  an  artificial  state 

(>  £  things  and  an  appearance  of  prosperity  which  deceived 

i  iany.     The  Secretary  of  the  Treasury,  with  the  hope  of 

r  iducing  interest,  caused  an  immense  depreciation  of  the 

(  .irrency  and  brought  upon  us  the  long  train  of  disasters 

i  :om  which  we  have  not  yet  recovered.     His  was  the 

]  olicy  of  selling  notes  at  half  or  one-third  of  their  face 

j  :>r  the  sake  of  saving  one  per  cent,  in  interest.     France, 

(  n  the  contrary,  arrested  speculation  by  advancing  the 

]  ate  of  interest  through  her  bank  and  kept  down  prices, 

i  hus  encouraging  exports  and  enabling  her  government 

*  o  buy  at  fair  prices.     Her  financial  policy  was  the  re- 

-erse  of  ours  and  the  result  was  more  propitious.     The 

hief  practical  example  she  now  gives  as  an  appropriate 

esson  for  the  condition  in  which  we  are  placed  is  that, 

>y  means  of  an  enlightened  and  moderately  liberal  com- 

Inercial  policy  for  the  benefit  of  the  people  at  large,  and 
lot  the  favoritism  of  the  few,  and  by  maintaining  a  large 
•eserve  of  specie  in  her  bank,  she  circulates  free  of  dis- 
jount  a  nominally  inconvertible  paper  currency  to  the 
unount  of  over  $500,000,000: 

I  Although,  owing  to  the  unparalleled  natural  wealth  of 
>ur  country,  the  results  of  defying  the  positive  laws  of 
political  economy  were  long  delayed,  the  time  necessarily 
jiii ne  when  the  speculations  thus  set  afloat  were  subjected 
to  the  inevitable  test  of  realizing  money  from  them ;  and 
it  was  found  they  rested  on  no  adequate  foundation. 
The  Administration  had  transferred  its  financial  agencies 
men  \vh>  had  been  foremost  in  advocating  its  sophis- 
tries and  stivmn>u<ly  striven  to  delude  the  people  by 
promulgating  the  doctrines  that  "a  national  debt  is  a 
national  Me^i 


and  that  "  debt  is  wealth."  The  lead- 
ing and  most  trusted  advisers  and  co-operators  of  the 
Government  in  its  financial  affairs  became  the  most  con- 
spicuous speculators.  The  system  significantly  culminated 
in  the  failure  of  the  houses  which  had  been  most  highly 
and  trusted  by  the  Administration.  A  run  for 
iposits  almost  immediately  followed.  The  sixty  banks 


212  THE   FINANCIAL   PROBLEM. 

of  New  York  were  liable  for  $200,000,000  to  their  depo- 
sitors. Speculation  had  become  so  rife  because  the  cur- 
rency was  far  in  excess  of  legitimate  commercial  demands 
that,  to  meet  the  emergency,  the  banks  had  depended  on 
"  call-loans."  The  bank  loans  throughout  the  United 
States  far  exceeded  those  of  any  other  date,  and  the  ratio 
of  cash  to  deposits  and  circulation  was  then,  as  it  had 
been  for  the  two  previous  years,  less  than  at  any  other 
time  during  the  last  forty  years.  In  New  York,  within 
little  more  than  three  weeks,  the  "  legal-tender  "  reserve 
was  reduced  from  thirty -four  millions  to  less  than  six 
millions.  The  securities  on  which  the  "  call-loans  "  had 
been  made  became  unsalable  except  at  ruinous  prices. 

Prominent  among  the  results  of  the  stimulation  of  a 
false  currency  was  a  mania  for  the  construction  of  rail- 
roads, which  averaged  nearly  six  thousand  miles  for  the 
five  years  ended  in  the  crisis,  against  an  average  of  about 
eleven  hundred  in  the  seven  years  ended  with  1866.  The 
reaction  was  so  disastrous  that  railroad  bonds  to  the 
amount  of  $56 7, 028, 639  were  in  default,  and  considerably 
less  than  half  of  the  railroad  stocks  in  the  whole  country 
paid  dividends,  entailing  losses  and  ruin  on  multitudes  of 
innocent  sufferers.  These  disasters,  though  more  easily 
computed  than  many  others  and  larger  in  amount  than 
any  other  single  class,  are  probably  little  more  than  fair 
specimens  of  the  widespread  calamities.  Many  manufac- 
tures, notably  those  of  iron,  cotton,  and  wool,  were  sus- 
pended or  put  on  short  time.  Laboring  men  and  women 
were  thrown  out  of  work  to  an  extent  previously  un- 
known in  the  history  of  our  country ;  immigration,  that 
prolific  source  of  our  prosperity,  decreased ;  multitudes 
returned  to  Europe  to  spread  abroad  in  every  land  the 
tidings  of  their  disappointments  and  deter  others  from 
embarking ;  and  the  number  of  bankruptcies  in  1873,  as 
also  in  1874,  exceeded  that  ever  before  known,  except  in 
1861,  the  year  when  the  memorable  destruction  of  trade 
and  capital  was  caused  by  the  war.  From  that  time  to 
this  the  commercial  confidence  necessary  to  the  employ- 
ment of  labor  has  been  impaired,  and  the  poverty  of  the 
masses  and  crime  have  increased  beyond  all  former  pre- 
cedent. In  addition  to  other  burdens,  we  sustained  in 


THE   FINANCIAL   PROBLEM.  213 

]  871  and  1872  losses  by  fire  in  the  cities  of  Chicago  and 
]  loston  amounting  to  $300,000,000,  an  amount  of  wealth 
;  ^  irretrievably  lost  as  if  it  had  been  swallowed  in 
(  lia^ms  caused  by  earthquakes  or  thrown  into  the  midst 
(  f  the  ocean. 

All  the  calamities  we  now  endure  would  have  been  in- 
( alculably  more  general  and  severe  but  for  the  prompt 
;  ction  of  the  clearing-house  through  which,  when  the 

<  risis  occurred,  the  stronger  banks  of  New  York  unit- 

<  d  to  sustain  the   weaker  by  combining  their  reserves 

<  f  legal-tender  notes  and  issuing   interest-bearing   loan 
ertificates,  which  were  made  the  media  for  the  payment 
•f  differences. 

It  is  instructive  to  note  that  throughout  the  history  of 
>ur  country  commercial  panics  have  universally  followed 
arge  expansions  of  the  currency.     By  unsettling  values 
ind  stimulating  wild  and  reckless  speculations  which,  but 
:'or  a  superfluity  of  the  circulating  medium,  would  never 
oe  undertaken,  they  draw  money  away   from  sound  in- 
/estments  which  would  yield  permanent  profit  to  those 
who  make  them  with  a  view  to  enriching  themselves  by 
rendering  real   services   to    the   people   at  large.     The 
national  industry  has  been  misdirected,  a  course  analogous 
to  waste  of  time  and  money  misspent  by  an  individual. 
The  violent  and  well-remembered  panic  of  1837  followed 
an    increase    of   $54,796,320 — or   from    $94,389,570    to 
$149,185,000 — in  the  circulation,  within  the  brief  period 
f  three  years,  while  during  the  same  period  the  loans 
nd  discounts,  which  practically  are  for  many  purposes 
part  of  the  currency,  increased  $198,996,261,  or  from 
".I.M;,  119,441  on  the  1st  of  January,  1834,  to  $525,115,702 
n  the  corresponding  day  in  1837.     Until  seventeen  years 
fter  wards  the  aggregates  of  the  loans  and  discounts  of 
he  banks  never  were  so  great  as  in  1837.     In  1857,  the 
ear  of  the  next  great  panic,    they    had    increased   to 
684,456,887,  and  in  the  two  preceding  years  the  currency 
had  increased  from  $186,952,223   to   $214,778,822.     In 
1860  the  paper  currency  was  $207,100,000,  but  in  1866, 
the  republican  regime,  the  outstanding  circulation 
increased  to  $648,866,000,  and  on  July  1,  1875,  to 


214  THE   FINANCIAL   PROBLEM. 

$727,640,588,  exclusive  of  over  forty-one  millions  of  frac- 
tional currency. 

The  notion  of  many  of  the  advocates  of  expansion  is 
vaguely  that  it  would  be  substantially  a  distribution  of 
money  among  the  masses  at  large ;  but  it  is  in  fact  one 
of  the  most  seductive  methods  of  depriving  those  who 
depend  on  their  labor  and  industry  of  their  just  reward, 
placing  colossal  fortunes  in  the  hands  of  a  few,  to  whom 
it  gives  a  lion's  share  of  the  little  the  people  individually 
possess,  taxing  their  labor  and  that  of  their  descendants, 
and  thus  endangering  even  the  Republic  and  the  liberties 
of  the  people.  This  has  been  the  uniform  experience  of 
mankind,  and  it  is  aptly  illustrated  by  the  history  of  our 
country  in  the  last  fifteen  years,  during  which  we  have 
had  an  irredeemable  circulation,  and  when,  while  wealth 
slipped  more  rapidly  than  ever  into  the  hands  of  specu- 
lators, the  number  of  bankruptcies  exceeded  those  of  any 
former  term,  and  poverty,  distress,  and  crime  have  made 
alarming  progress  unprecedented  in  the  history  of  our 
country. 

It  may  be  freely  admitted  that,  at  first  sight,  the  theory 
that  paper  promises  to  pay  are  capital  is  not  without 
some  show  of  plausibility.  Currency  is  the  symbol  of 
wealth,  and  the  shadow  is  frequently  mistaken  for  the 
substance.  It  is,  in  fact,  when  inflated,  nothing  more 
than  so  much  "  watered  stock."  The  value  is  nominally 
increased,  but  the  actual  property  remains  the  same. 
Sooner  or  later  the  fraud  is  exposed,  but  from  time  to 
time  this  is  again  forgotten,  and  a  new  era  of  inflation 
and  delusion  begins,  to  end  in  the  same  way  as  its 
predecessors.  The  experiment  has  often  been  made,  and 
as  often  attended  by  the  same  bitter  lessons.  Yet,  with, 
new  men,  the  old  errors  are  repeated.  Happily  for  man- 
kind, nations  are  long-lived,  seldom  dying,  and  in  some 
degree  the  wisdom  gained  by  one  generation  filters  down 
the  course  of  time  to  its  successors.  As  on  some  points 
the  laws  of  finance  are  as  positive  as  those  of  physical 
nature,  the  experience  of  other  countries  is  instructive. 

In  1797  the  Bank  of  England  began,  under  authority 
of  Parliament,  to  issue  excessive  amounts  of  notes,  which 
the  London  merchants  agreed  to  receive  at  par.  Even 


THE   FINANCIAL   PROBLEM.  215 

t  ais  could  not  prevent  their  depreciation.  Parliament 
,^3conded  the  ineffectual  efforts  and  in  1811  passed  the 
(  elebrated  resolution  that  "the  price  of  gold  had  advanced, 
1  ut  the  value  of  bank-notes  was  not  depreciated "  —a 

<  omplete  counterpart  to  the  declaration  of   one  of  our 

<  wn  Secretaries  of  the  Treasury,  who  claimed  to  be  the 
;  uthor  of  the  legal-tender  system,  that  gold  had  increased 

a  value  but  that  his  paper  money  had  not  depreciated. 

n  1814  a  British  "gold-bill"  was  passed,  enacting  that 

•  the  taking  of  gold  coin  at  more  than  its  value  or  bank- 

lotes  at  less  shall  be  deemed  a  misdemeanor."     It  wTas  as 

neffectual  as  our  own.    The  trade  in  the  precious  metals 

\  as  conducted  as  openly  as  ever  and  the  depreciation  of 

:he  notes  continued.     No  effort  was  made  to  enforce  the 

JH potent  law.    The  notes  remained  below  par  for  nineteen 

years.      At    last    the    celebrated    "  bullion-committee," 

.  appointed  by  Parliament  to  investigate  the  calamitous 

condition  of  British  financial  affairs  and  their  inconsistency 

with  the  theories  too  generally  believed,  recognized  the 

actual  depreciation  and  declared  that  this  was  the  cause 

of  the  general  advance  in  prices.     Its  main  conclusion 

was  that  "  the  country  ought  to  be  brought  back  with  as 

inurli  speed  as  is  compatible  with  a  wise  caution  to  the 

original  principle  of  cash  payments  at  the  option  of  the 

h"Mers  of  bank-notes." 

The  highest  officials  of  the  time,  the  London  bankers, 
and  the  nation  at  large,  with  the  exception  of  a  few 
thinking  men,  long  continued  to  re-assert  that  the  large 
volume  of  the  currency  had  nothing  to  do  with  the  rise 
in  prices ;  that  the  bank-notes  had  lost  nothing  of  their 
value,  and  that  no  restriction  of  the  circulation  was 
needed.  It  was  not  until  eight  years  afterward  that  the 
public  had  been  instructed  by  the  logic  of  events,  and, 
with  few  exceptions — which,  however,  included  the 
dim-tors  of  the  Bank  of  England — the  truth  of  the  doc- 
trines held  by  the  committee  was  universally  admitted. 

The  following  axioms  were  regarded  as  mcontroverti- 
bly  established : 


If  gold  is  at  a  premium  in  paper,  the  paper  is  redundant  and 
depreciated,  the  premium  measures  the  depreciation. 


n 


216  THE   FINANCIAL   PROBLEM. 

If  the  inferior  currency  be  removed,  the  exchanges  will  be 
turned,  the  overflow  will  stop,  and,  if  any  vacuum c  is  created, 
gold  will  flow  in  to  supply  it. 

A  better  and  a  worse  currency  cannot  circulate  together. 
The  worse  will  drive  out  the  better. 

The  views  of  the  committee  have  long  continued  to 
be,  in  substance,  the  laws  of  finance  in  Great  Britain  ; 
and  for  more  than  thirty  years  the  use  of  bank-checks 
and  other  modern  means  of  facilitating  payments  has 
been  so  great  that  there  has  been  no  material  increase  in 
her  paper  currency,  although  during  the  same  time  her 
commercial  transactions  have  been  multiplied  fourfold. 

The  depreciation  of  the  currency  of  France,  under  the 
regency  of  Louis  XV.,  has  become  proverbial.  At  its 
origin  it  had  its  advocates,  but  although  France  prohib- 
ited the  use  of  coin  and  decreed  even  the  penalty  of 
death  for  those  who  refused  to  receive  the  paper  at  par, 
it  fell  until  the  nominal  equivalent  of  one  hundred  dollars 
would  buy  only  a  single  pound  of  butter.  At  last  it  be- 
came utterly  worthless;  the  people,  by  common  consent, 
returned  to  a  specie  currency ;  and  the  author  of  the 
scheme  only  escaped  from  the  country  at  the  peril  of 
his  life. 

Austria  has  been  slower  to  learn,  and  her  disasters 
have  been  prolonged  to  a  much  more  recent  date.  Sixty- 
five  years  ago  her  currency  was  so  far  reduced  in  value 
that  she  issued  "  redemption  notes,"  in  which  it  was  to 
be  "  redeemed  "  at  the  rate  of  three  to  one.  This  having 
failed,  she  over  and  over  again,  under  new  names,  such 
as  "  Viennese  legal-tender  "  •  and  "  anticipation  notes," 
vainly  sought  to  provide  substitutes  for  a  metallic  stand- 
ard. In  1873  she  suffered  from  a  panic  bearing  a  close 
resemblance  to  our  own.  After  her  war  of  1866  large 
issues  of  paper  money  were  made,  which  led  to  a  belief 
in  the  abundance  of  capital  and  to  speculations  of  all 
kinds.  The  government  itself  gave  aid  by  guaranteeing 
dividends  on  various  railroads.  The  market  was  glutted 
with  an  immense  quantity  of  so-called  securities,  in 
which  it  was  for  the  time  impracticable  to  distinguish 
between  the  good  and  the  bad.  The  inevitable  crash 
ensued.  As  in  this  country,  the  leading  speculators  were 


THE   FINANCIAL   PROBLEM.  217 

1  ie  first  to  suspend.  Their  example  was  soon  followed 
1  y  a  multitude  of  smaller  operators.  Even  the  strong 
]  ouses  were  shaken.  The  bourse  was  closed  to  prevent 
\  iolence  among  its  more  adventurous  members,  some  of 
A  rhom  committed  suicide. 

In  the  yet  brief   history   of  the  United   States  and 
( Canada  the  same  lesson  has  been  no  less  imperatively 
1  itight.     I  pass  over  the  examples  to  be   found  in  the 
3  ecords  of  the  individual  States  and  colonies.     Franklin 
I  .imself ,  early  in  the  revolutionary  war,  warmly  approved 
'  he  issue  of  bills  "  on  the  faith  of  the  continent."     One 
aember  of  the  Congress,  who  seems  to  have  been  alone 
n  his  views,  or  in  the  courage  needed  to  avow  them, 
irged  taxation,  but  was  bluffed  by  one  of  the  almost 
mammons  majority,  who,  in  a  spirit  of  which  we  have 
conspicuous  examples  in  our  own  time,  asked  "  if  he  was 
;o  help  to  tax  the   people  when   they  could  go  to  the 
printer's  office  and  get  a  cart-load  of  money."     The  cur- 
rency decreased   in   value    until   monstrous   sums   were 
needed  to  buy  a  cow  or  procure  a  frugal  meal.     It  be- 
came exchangeable  only  at  the  rate  of  a  thousand  dollars 
for  one  sound  dollar.     This,  too,  in  spite  of  penal  laws 
to  enforce  the  impracticable  wishes  of  Congress.     The 
historian  of  the  time  says  : 

(Wealth  was  accumulated  by  the  dishonest  multitudes  ef  con- 
tractors and  the  many  defrauders  of  that  unhappy  period,  while 
more  deserving  men  felt  that  it  had  been  plundered  from  their 
own  coffers  for  the  aggrandizement  of  such  people. 

No  thoughtful  statesman  ever  overlooks  the  precedents 

(establishing  the  positive  conclusion  that  wherever  legisla- 
tors have  attempted  by  penalties  to  compel  the  people  to 
take  irredeemable  paper  at  par  with  coin  the  laws  of  the 
strongest  alike  with  the  weakest  governments  have  sig- 
nally failed  in  enforcing  their  wishes. 

Stripped  of  the  sophistries  with  which  it  is  frequently 
surroundi-d,  the  necessity  of  a  fixed  standard  of  value  in 
all  the  commercial  and  monetary  affairs  of  the  nation  is 
so  clear  that  he  who  runs  may  read  it.  Paper  money 
may  be  freely  used ;  checks  or  bills  of  exchange,  aided 
>y  the  railroad,  telegraph,  and  post-office,  may  transact 


218  THE  FINANCIAL   PROBLEM. 

nearly  all  such,  business  of  the  country  as  is  on  a  large 
scale,  and  tend  to  prevent  any  exorbitant  rate  of  interest ; 
but  it  is  essential  that  all  these  means  should  simply  rep- 
resent one  universal  and  uniform  standard.  Without 
this  guard,  they  become  uncontrollable  and  unsound — ex- 
tortionate taskmasters  instead  of  good  and  faithful  ser- 
vants. 

In  the  minds  of  many  men  affairs  of  state  are  sur- 
rounded with  a  confusing  mystery,  as  if  the  principles  of 
ordinary  facts  and  common  sense  could  not  be  applied  to 
them.  Yet  it  is  plain  that  trade  in  grain  of  any  kind 
would  be  placed  under  such  enormous  disadvantages  as 
to  render  it  almost  impossible  if  the  bushel  measure  of 
to-day  might  be  larger  or  smaller  to-morrow  from  causes 
the  farmer  or  merchant  could  not  foresee  and  altogether 
independent  of  their  control.  The  dealers  in  textile  fa- 
brics, and  in  land  itself,  would  be  in  strange  predicaments 
if  the  yard  and.  the  foot  were  subject  to  great  and  frequent 
variations,  and  might  represent  at  one  time  little  more 
than  a  third  of  their  measure  at  another.  Yet  the  obsta- 
cle which  has  been  thrown  in  the  way  of  the  trade  and 
prosperity  of  the  country  is  almost  exactly  of  the  same 
nature.  The  "  legal-tender  "  dollar  at  one  time  was  worth 
little  more  than  a  third  of  the  true  dollar,  and  continually 
changes  from  day  to  day,  making  trade  uncertain  and 
values  of  all  kinds  doubtful.  No  man  knows  when  he 
rises  what  they  may  be  that  morning,  or  when  he  goes  to 
his  place  of  business  what  they  may  be  before  the  sun 
sets.  It  is  an  established  fact  that  the  greatest  possible 
certainty  of  value  is  attainable  only  by  enforcing  the 
standard  of  the  precious  metals ;  they  become  the  prop- 
erty of  whatever  nation  or  individual  will  give  most  for 
them.  Their  portability  and  the  universal  recognition  of 
their  value  throughout  the  world  make  them  the  natural 
and  least  fluctuating  medium  of  exchange,  and  arbitrary 
legislation  has  been  and  seemingly  always  will  be  unsuc- 
cessful in  discovering  or  enforcing  any  stable  substitute 
for  them. 

Gold,  by  the  Constitution  of  the  United  States,  is  a  legal 
tender,  and,  as  a  necessary  consequence,  the  standard  of 
value.  That  instrument  gives  no  authority  or  power  to 


THE   FINANCIAL   PROBLEM.  219 

my  department  of  the  Government  to  is>ur  legal-tender 
mper,  or  a  currency  payable  on  demand.  The  only 
ground  upon  which  it  was  issued  during  the  civil  war 
,va<  that  of  seeming  necessity,  it  being  supposed  that  the 
3xistence  and  supremacy  of  the  Government  were  invol- 
ved. Without  entering  into  the  conflicting  decisions  of 
the  Supreme  Court  of  the  United  States,  it  is  sufficient  to 
know  that  they  endorsed  the  issue  of  legal  tender,  but 
only  as  a  war  necessity.  It  necessarily  follows  that  it 
could  not  otherwise  be  legally  issued.  Under  a  proper 
construction  of  the  Constitution  this  is  impossible ;  and 
as  democrats  adhere  to  that  instrument,  they  cannot  for 
a  moment  contend  for  such  a  proposition. 

When  the  legal  tender  issued  by  the  Government  is 
withdrawn,  it  must  cease  to  issue  more  or  any  paper  cur- 
rency whatever. 

The  right  to  control  the  financial  affairs  of  the  country 
by  increasing  the  circulating  medium  at  his  own  will  is 
too  dangerous  a  power  to  be  lodged  in  the  hands  of  the 
Secretary  of  the  Treasury.  That  high  official  is  seldom 
chosen  for  his  adaptation  to  the  special  duties  devolved 
upon  him.  He  may  be  one  who  has  attained  political 
rank,  yet  be  profoundly  ignorant  of  the  simplest  facts 
and  principles  in  modern  science,  and  become  a  mere  par- 
tisan intriguer.  At  another  time  the  holder  of  that  of- 
fice may  be  a  man  of  sterling  principles,  sound  doctrines, 
and  pure  character ;  but  in  the  change  of  parties  there 
can  be  no  certainty  of  this.  We  know  the  common  weak- 
nesses of  human  nature,  and  should  guard  against  them 
by  making  the  temptations  to  do  wrong  as  few  and  slight 
as  possible.  Hence  the  aim  of  all  good  citizens  should  be 
to  separate  the  Government  from  the  business  of  banking. 
It  cannot  remain  in  the  hands  of  the  Government  without 
creating  such  centralization  and  influences  as  are  hostile 
to  tin- spirit  and  perpetuity  of  republican  institutions. 

Upon  the  withdrawal  or  redemption  of  the  legal  tender 
and  the  resumption  of  specie  payment,  the  issue  of  new 
currency  should  be  practically  free  to  the  banks  to  any 
extent  on  the  deposit  of  national  bonds  as  security  for  the 
circulation.  Under  these  conditions  there  would  be  free 
trade  in  money.  The  law  of  supply  and  demand  would  solve 


220  THE   FINANCIAL   PROBLEM. 

the  question  of  the  currency,  and  the  largest  practicable 
amount  of  Benefit  the  banks  can  render  would  be  attained, 
while  the  circulation  would  be  kept  within  moderate  limits 
and  gradually  attain  the  true  and  honest  standard  of  the 
world.  As  one  of  the  ultimate  results,  the  time  may 
come  when  their  notes,  amply  secured  by  Government 
bonds,  in  a  proportion  which  will  assuredly  command 
specie,  may  be  accepted  by  the  Government  in  payment 
of  its  dues  and  re-issued  for  its  current  expenses. 

I  do  not  know  any  more  striking  instance  of  the  for- 
getfulness  of  yet  recent  history  and  the  superficial  con- 
sideration, too  often  with  the  most  deplorable  results, 
given  to  the  affairs  which  concern  us  all,  than  the  impres- 
sion on  the  minds  of  some  candid  men,  and  the  loud  and 
reiterated  assertions  of  others,  that  the  democrats  are 
the  party  of  inflation,  and  the  republicans  are  the  most 
reliable  supporters  of  a  sound  currency  and  a  return  to 
specie  payment.  The  traditional  policy  of  the  democrats 
is  that  of  a  currency  redeemable  in  hard  money,  and  will 
be  so  to  the  end.  Individuals  are  to  be  found  who  on 
other  points  agree  with  them,  but  believe  in  the  pernicious 
doctrine  of  an  irredeemable  currency.  They  are  not  the 
party,  and  misrepresent  its  well-known  and  hitherto  uni- 
versally admitted  tenets.  On  the  other  hand,  the  repub- 
licans, from  the  beginning  of  their  possession  of  power 
to  the  present  time,  have  uniformly  practiced  the  fraud, 
and  attempted  to  justify  it,  until  their  efforts  were  no 
longer  availing.  They  took  from  the  banks  the  power  of 
paying  in  specie,  are  responsible  for  the  whole  existing 
system  of  paper  money,  and  in  the  height  of  their  delu- 
sions took  from  it  the  redemption  in  national  bonds  which 
would  certainly  have  led  the  country  safely  to  specie  pay- 
ments many  years  ago. 

Some,  although  holding  general  allegiance  to  the  re- 
publican party,  were  so  far  patriotic  and  wise  as  to  warn 
it  against  the  cause  from  which  most  of  our  financial 
evils  sprang,  and  have  since  wrung  from  it  spasmodic 
promises  of  reform  which  have  been  as  often  broken. 

There  are  many  conspicuous  instances  of  this  practical 
deception.  One  of  them  was  the  first  act  of  Congress 
approved  by  President  Grant  after  his  inauguration.  In 


THE   FINANCIAL   PROBLEM.  221 


P 


•  lear  and  terse  words  it  explicitly  declared  that  "  the 
aith  of  the  United  States  is  solemnly  pledged  io  the  pay- 
nent  in  coin  or  its  equivalent  of  the  United  States  notes," 
ind  that  Congress  "  pledges  its  faith  to  make  provision 
it  the  earliest  practicable  period  for  the  redemption  of 
;he  United  States  notes  in  coin."      The  hopes  thus  given 
vvere  fallacious.     The  congressional  majority  arrested  the 
contraction  begun  by  McCulloch  when  Secretary  of  the 
Treasury,  and  were  supported  by  the  illegal  inflation  by 
Boutwell  and  his  successor.     Six  years  ago,  in  1870,  the 
premium  on  gold  fell  to  8  J  per  cent.,  and  yet  it  was  not 
long  ago  17^,  and  is  now  about  13.     During  the  last  six 
years,  under  republican  control,  paper  money  has  receded 
farther  from  approaching  to  an  equality  with  gold. 

The  people  are  vitally  interested  in  a  return  to  a  specie 
basis.  The  paper  they  now  receive  for  services,  daily 
toil,  and  general  business  purposes  is  worth  only  eighty- 
seven  cents  on  the  dollar,  through  its  depreciation  to 
that  extent  below  gold  value,  which  they  pay  for  nearly 
all  the  articles  required  for  daily  use.  No  sophistry  can 
long  continue  to  delude  them,  while  a  vigilant  press  pene- 
trates the  remotest  parts  of  the  country,  into  a  belief  that 
such  depreciated  and  inconvertible  paper  money  is  the 
best  currency. 

•  The  expediency  of  a  return  to  specie  payments  may  now 
be  taken  for  granted.  The  present  time  is  the  most  op- 
portune we  have  had  since  inflation  began  for  making  vigor- 

I  oils  i  (reparations  for  specie  payments.  The  premium  on 
gold  has  been  reduced  by  commercial  causes,  apart  from 
legislation,  from  185J  to  12  or  13  per  cent.,  thus  indicating 
that  the  remaining  steps  to  gold  at  a  par  rate  with  notes 
can  gradually  be  safely  retraced  by  no  extraordinary 
amount  of  statesmanship,  provided  it  is  sincere  and  per- 
severing. Since  the  war  began  the  circulating  medium  has 
incivuscd  three  times  as  fast  as  the  population.  In  New 
York  the  accumulation  of  money  and  the  low  rate  at  which 
it  may  be  had  are  unprecedented  ;  but  a  few  borrowers 
whom  the  capitalists  will  trust  are  to  be  found.  Low  as 
the  rate  of  interest  throughout  the  world  has  long  been, 
money  was,  for  several  months,  cheaper  in  New  York  than 
in  the  great  cosmopolitan  market  of  London,  the  difficul- 


222  THE   FINANCIAL   PROBLEM. 

ty  of  our  capitalists  having  been  to  find  profitable  employ- 
ment for  their  currency  at  home.  A  similar  state  of 
affairs  prevails,  though  in  a  minor  degree,  at  Chicago, 
Cincinnati,  and  the  other  great  financial  centres  of  the 
Union.  Even  the  bill  passed  June  20,  1874,  with  the 
intention  of  increasing  the  currency,  has  proved,  as  clearly 
as  the  thermometer  shows  temperature,  that  more  is  not 
needed,  and  that  there  is  a  redundancy  above  the  wants 
of  the  people.  Under  its  operations,  and  after  allowing 
for  the  new  circulation,  there  has  been  a  net  contraction 
of  the  paper  currency  to  the  amount  of  over  twenty  mil- 
lions within  a  year.  Banks  are  unable  to  employ  their 
money  at  fair  profits.  The  legal-tender  and  other  reserves 
held  by  the  banks  of  the  country  at  this  time  are  largely 
in  excess  of  the  requirements  of  the  law. 

The  abundance  of  money  throughout  the  civilized 
world  affords  peculiarly  favorable  opportunities  for  fund- 
ing or  obtaining  specie  and  foreign  credits,  which,  to  a 
certain  extent,  are  identical  with  each  other.  The  futility 
of  expanding  the  currency  was  signally  demonstrated  by 
the  Secretary  of  the  Treasury,  during  the  panic  of  1873, 
who  issued,  without  authority  of  law,  $26,000,000  of  notes, 
in  the  vain  hope  of  relieving  the  money  market.  These 
notes  did  not  enter  at  all  into  the  general  circulation,  but 
were  hoarded  by  saving-banks  and  trust  companies,  as 
were  those  which  had  been  already  withdrawn  from  the 
banks  of  discount  and  deposit.  Large  exportations  of 
grain  to  Europe  from  this  side  of  the  Atlantic  are  expected. 
Our  imports  have  enormously  shrunk.  The  people  them- 
selves are  more  than  usually  iree  from  debt ;  and  last,  but 
not  least,  is  the  encouraging  fact  that  their  minds  have  been 
long  and  carefully  prepared  by  an  increasingly  intelligent 
press,  never  before  so  sound  and  well  informed  on  finan- 
cial topics,  to  take  more  than  superficial  views  and  look 
beyond  the  delusions  of  what  is  merely  immediate  and 
temporary  to  that  which,  though  slightly  more  remote,  is 
permanent  and  real.  The  Government,  at  present  unable 
to  redeem  its  promises  to  pay,  may  never  again  have  so 
good  an  opportunity  of  beginning  the  process  of  exchang- 
ing its  bonds .  at  a  low  rate  of  interest,  or  the  national 
banks  of  laying  up  the  reserves  of  specie,  on  which,  in 


THE   FINANCIAL   PROBLEM.  223 

t  leir  hands,  under  the  wholesome  law  of  free  competition, 
t  le  restoration  of  prosperity  depends. 

On  the  other  hand,  if  the  policy  of  the  expansionists 
( ould  be  followed,  the  return  to  specie  payments  and  the 
h  iiccessful  funding  of  the  debt,  long  ago  due  on  demand, 
1  ut  yet  unpaid,  will  become  more  and   more  difficult, 
i  .ntil,  as  we  have  seen  has  repeatedly  been  the  case  in 
« -ther  countries  and  our  own,  the  control  of  legislation 
vill  be  lost,  broken  promises  will  be  renewed  only  by 
nuking  more  of  them,  and  widespread  disaster,  misery, 
•epudiation,  and  national  dishonor  will  ensue.     We  have 
•eached  a  point  where  any  expansion  of  an  irredeemable 
•urrency  means  its  indefinite  increase,  and  are  approach- 
ng  that  crisis  against  which  the  united  wisdom  of  many 
generations  warns  us,  in  the  maxim  that  the  descent  to 
lestruction  is  easy,  but  the  labor  and  work  of  retracing 
mr  steps  is  difficult,  if  not  impossible. 

We  have  now  arrived  at  the  period  when  inflation  no 
longer  inflates.  In  the  body  political  and  financial,  as  in 
the  human  body,  there  is  a  point  where  the  power  of 
stimulants  ceases  and  can  no  longer  prevent  collapse.  This 
is  the  law  of  all  serious  panics  and  their  results.  There 
is  a  great  shrinkage  in  business,  and  no  important  revival 
can  be  expected  until  a  new  financial  system  which  will 
deserve  and  receive  public  confidence  is  fairly  begun.  In 
proportion  as  there  is  a  cry  for  inflation,  capital,  prover- 
}>ially  timid,  seeks  for  safety,  withdraws  from  enterprise, 
find  refuses  to  employ  labor.  Until  the  future  policy  of 
the  Government  is  permanently  settled,  there  can  be  no 
real  renewal  of  the  commercial  and  general  prosperity  of 
the  country. 

The  act  of  January  14,  1875,  passed  by  the  last  repub- 
lican Congress  under  the  previous  question,  cutting  off 
all  debate,  has  done  more  than  any  other  single  measure 
to  produce  expansionists.  It  has  created  alarm  in  busi- 
ness circles  and  given  to  inflation  an  importance  it  could 
not  otherwise  have  attained.  The  impression  is  that  if 
the  act  l»e  riir'nlly  enforced  the  contraction  of  the  currency 
will  of  necessity  be  so  rap;d  as  to  produce  again  wide- 
spread disu<t<T,  uud  such  undoubtedly  would  be  the  case 
if  resumption  were  really  enforced  at  the  date  named  for 


224  THE    FINANCIAL   PROBLEM. 


it,  January  1,  1879.  "While  the  majority  of  the  House 
is  not  responsible  for  this  act  or  its  consequences,  it 
should  not  be  repealed  unconditionally  and  without  sub- 
stituting for  it  some  better  measure  having  for  its  object 
the  resumption  of  specie  payments  at  the  proper  time. 
A  modification  of  the  law,  one  more  in  accordance  with 
the  true  interest  of  the  country,  will  be  no  doubt  effected. 
So  long  as  the  Government  continues  practically  to  insist 
that  its  own  notes  are  of  an  inferior  value  to  the  precious 
metals,  a  most  serious  financial  error  is  committed,  and 
a  policy  in  opposition  to  the  resumption  act,  and  far- 
reaching  in  its  effect,  is  perpetuated.  I  express  only  the 
general  opinion  of  the  most  sagacious  financiers  when  I 
say  that  so  long  as  this  barrier  remains  specie  payments 
cannot  be  attained  for  many  years. 

I  regard  a  moderate  contraction  of  legal-tender  as  in- 
dispensable and  vital  to  the  resumption  of  specie  pay- 
ments. It  is  the  necessary  guarantee  to  be  given  by  the 
national  legislators  to  the  people  that  they  may  confi- 
dently rely  on  the  sure  approach  of  a  sound  currency, 
but  so  far  as  it  is  enforced  it  should  be  so  gradual  as  not 
to  disturb  too  violently  the  various  existing  interests  of 
the  production,  commerce,  and  property  of  the  country. 
This  should  be  done  by  funding  legal-tender  paper  into 
bonds  at  the  lowest  practicable  rate  of  interest.  This 
simple  process,  fairly  carried  out,  would  probably  turn 
the  foreign  exchanges  in  favor  of  this  country  to  such  a 
degree  that  we  should  not  only  retain  the  immense  pro- 
duct of  our  own  mines,  but  that  there  would  be  returned 
to  us  a  sufficient  amount  of  the  precious  metals,  now 
driven  away  to  other  lands  by  excessive  paper  issues,  to 
enable  us  to  resume  specie  payments.  All  this  would  be 
done  by  a  process  perfectly  natural  and  in  strict  har- 
mony with  the  well-settled  principles  of  trade  and 
finance.  The  time  to  resume  will  be  when  we  are  pre- 
pared to  do  so,  and  is  not  within  the  ken  of  legislators, 
be  they  ever  so  wise,  to  fix  it  definitely  by  statute. 

At  the  same  time  there  should  be  some  definite  and 
absolute  provision  for  moderate  but  steady  contraction. 
Among  the  possibilities  of  the  future  is  such  a  demand 
for  money  as  would  make  it  unprofitable  for  the  banks 


; 


THE   FINANCIAL   PROBLEM!.  225 

i  >  convert  the  legal-tender  they  hold  into  bonds  at  the 
]  >west  rate  of  interest.  I  would,  therefore,  suggest  as  a 
neans  of  gradual  contraction,  and  with  a  view  to  render- 
i  ig  more  certain  the  resumption  of  specie  payments,  that 
the  Government  should  authorize  the  purchase  and 
mcellation  of  some  moderate  amount,  say  $1,000,000 
]  er  month,  of  the  legal-tender  notes,  and  authorize  the 
t  ecretary  of  the  Treasury  to  sell  5  per  cent,  bonds — if 
1  onds  at  a  lower  rate  of  interest  cannot  be  negotiated — 

<  f  the  United  States  to  provide  funds  for  that  object, 
1  he  first  great  step  would  be  taken  towards  resumption, 
•<  without  injury  to  the  financial  and  business  interests  of 
1  he    country.       Under    the    recommendations    of     Mr. 
"  IcCulloch,  when  Secretary  of  the  Treasury,  contraction. 

<  n  a  larger  scale  was  begun,  but  Congress,  fearful  of  the 
»  ffect,  withdrew  its  assent.     I  propose  that  the  rate  and 
:  aethod  of  contraction  shall  be  so  gradual  that  Congress 

<  an   have   no   excuse  for   again  intervening.     Rigid  ad- 
'.  lerence  to  such  a  course  would  indicate  a  determination. 

o  return  to  a  sound  foundation ;  the  absence  of  the 
nferior  currency  would  be  gradually  supplied  by  the 
;  iiiperior ;  the  problem  as  to  the  method  of  resumption 
vould  be  solved,  and  the  system  work  itself  out  by  a 
latunil  process,  while  individuals  and  the  banks  would 
iavc  ample  time  to  prepare  for  anew  condition  of  affairs. 
Business  being  thus  adjusted  upon  the  new  basis,  confi- 
lence  would  return,  and  with  it  prosperity  prevail. 

The  country  is  disposed  to  look  to  the  democratic 
party  for  a  return  to  the  economy  and  integrity  in  the 
idministnition  of  public  affairs  and  for  the  introduction, 
ind  adoption  of  measures  well  calculated  to  restore  to 
a  safe  and  harmonious  basis  the  financial,  commercial, 
and  material  interests  of  the  nation.  It  yet  remains  to 
be  seen  whether  the  leaders  fully  recognize  the  exigencies 
of  the  occasion  and  realize  the  necessities  and  hopeful 
expectations  of  the  people. 
15 


DISTRIBUTION  OF  THE  GENEVA  AWARD. 


HOUSE  OF  REPRESENTATIVES,  May  23,  1876. 


A  bill  ignoring  the  legal  rights  of  parties  on  whose  behalf  the 
Government  of  the  United  States  obtained  the  award  by  the 
tribunal  of  arbitration  at  Geneva  and  collected  the  money  from 
Great  Britain,  or  postponing  its  payment  until  certain  invalid 
and  improperly  preferred  claims,  rejected  by  the  tribunal  and 
indefinite  in  amount,  have  been  satisfied,  having  been  reported  from 
the  Judiciary  Committee,  a  remonstrance  was  addressed  to  both 
houses  of  Congress  by  several  of  the  chief  insurance  companies, 
and  presented  in  the  House  of  Representatives  by  Mr.  Ward, 
and  at  his  request  read  by  the  Clerk.  Mr.  Ward  then  said : 

MB.  CHAIRMAN:  At  the  request  of  many  of  my  con- 
stituents, who  are  deeply  interested,  and  in  accordance 
with  my  own  sense  of  right  and  duty,  I  present  to  the 
House,  as  briefly  and  distinctly  as  I  can,  my  views  on  the 
important  subject  of  the  distribution  of  the  funds  awarded 
by  the  tribunal  of  arbitration  at  Geneva.  In  my  opinion 
the  length  of  the  discussion  regarding  it  is  to  be  attributed 
rather  to  the  magnitude  of  the  amount  involved  than  to 
;any  intrinsic  difficulty  in  understanding  or  determining 
the  principles  of  law  and  justice  so  far  as  they  are  appli- 
cable to  this  case. 

During  the  war  various  insurance  companies  and  pri- 
vate claimants  sent  memorials  to  the  Department  of  State, 
setting  forth  their  demands  against  Great  Britain  for 
losses  growing  out  of  the  destruction  of  vessels  and  their 
cargoes  by  the  cruisers  of  the  insurgents,  and  requested 
the  interposition  of  the  Government  of  the  United  States 
in  their  behalf.  The  underwriters,  confidently  relying 
on  the  ultimate  protection  of  their  rights  by  their  country, 
from  time  to  time,  as  they  paid  for  vessels  and  cargoes 
destroyed  by  the  cruisers,  communicated  to  the  State  De- 
partment full,  formal  proofs  of  the  facts  and  of  the  value 


DISTRIBUTION   OF   THE   GENEVA   AWARD.       227 

0  !  the  losses.    The  Department,  through  the  Hon.  William 

1  '.  Seward,  then  Secretary  of  State,  punctiliously,  as  was 
1  is  duty,  replied  to  each  of  the  statements  thus  made,  and 
t  ansmitted  the  claim  "  to  the  United  States  Minister  at 
]  on  don,  with  a  view  to  such  reparation  as  may  be  justly 
cl  ie." 

Afterwards,  when  the  war  was  over,  the  Government, 
t  irough  the  Department  of  State,  issued  an  official  notice, 
rated  September  22,  1865,  calling  upon  "citizens  of  the 
1  'nited  States  having  claims  against  foreign  governments, 
i  ot  founded  on  contracts,"  to  forward  them  to  that  De- 
]  artment,  urgently  asking  compliance  "  without  delay," 
i  nd  accompanied  the  notice  with  rules  for  the  guidance 
c  £  applicants,  directing  the  insertion  in  each  claim  of  a 
i  ^quest  ufor  the  interposition  of  this  Government  with 
t  le  foreign  government  against  which  the  claim  is  pre- 
£  mted."  In  accordance  with  the  trust  thus  confided  to  our 
( rovernraent  by  the  sufferers,  the  claims  were  duly  pre- 
s  3nted  to  the  Government  of  Great  Britain  and  subse- 
c  uently  to  the  tribunal  at  Geneva. 

In  pursuance  of  the  same  line  of  manifest  duty,  re- 
(  uiring  every  government  to  afford  due  protection  to  its 
( itizens  or  subjects,  Mr.  Fish,  as  Secretary  of  State,  re- 
plied  to  letters  enclosing  claims  of  the  class   already 
c  escribed,  promised  that  his  Department  would  "  present 
to  the  tribunal  at  Geneva,  to  be  taken  into  account  in 
estimating  the  sum  to  be  paid  to  the  United  States,  all 
claims  growing  out  of  the  acts  of   the  several  vessels 
vhich  have  given  rise  to  the  claims  generally  known  as 
he  Alabama  claims,"  and  requested  that  they  might  be 

•utrd  in  due  time. 

The  claims  were  duly  presented  by  our  Government  to 
he  tribunal  at  Geneva,  in  accordance  with  the  treaty  of 
vVashington.  Throughout  all  the  proceedings  they  were 
miformly  treated  as  the  claims  of  private  parties,  who 
>ii  their  part  place;  1  implicit,  unquestioning  trust  and 
•ontidence  in  the  due  protection  and  good  faith  and  in- 
i-L'rity  of  the  Government.  All  doubt  or  question  as  to 
.heir  rights  or  the  disposal  of  the  funds  is  an  after- 
oiight,  having  no  origin  in  the  tribunal  and  contrary  to 
-  intentions  and  conclusions. 


228       DISTRIBUTION   OF   THE   GENEYA    AWARD. 

In  formally  submitting  its  case  to  the  tribunal,  the 
Government  of  the  United  States  placed  first  in  the  gen- 
eral statement  of  the  claims  for  which  it  asked  repara- 
tion "  the  direct  losses  growing  out  of  the  destruction  of 
vessels  and  their  cargoes  by  the  insurgent  cruisers."  The 
other  injuries  for  which  compensation  was  sought  were — 

The  national  expenditure  in  the  pursuit  of  those 
cruisers ; 

The  loss  in  the  transfer  of  the  American  commercial 
marine  to  the  British  nag ; 

The  enhanced  payments  of  insurance ; 

The  prolongation  of  the  war,  and  the  addition  of  a 
large  sum  to  the  cost  of  the  war  and  the  suppression  of 
the  rebellion. 

Great  Britain  objected  to  the  presentation  of  the  three 
latter  classes  of  claims,  and  refused  to  proceed  with  the 
arbitration  unless  they  were  withdrawn.  The  United 
States  refused  to  withdraw  them.  A  failure  of  the  ar- 
bitration was  imminent.  At  this  crisis,  the  president  of 
the  tribunal,  on  behalf  of  all  the  arbitrators,  announced 
that  they,  after  the  most  careful  perusal  of  all  that  had 
been  said  on  the  part  of  the  Government  of  the  United 
States  in  respect  to  these  classes  of  claims,  had  "  arrived 
individually  and  collectively  at  the  conclusion  that  these 
claims  do  not  constitute,  upon  the  principles  of  interna- 
tional law  applicable  to  such  cases,  good  foundation  for 
an  award  of  compensation  or  computation  of  damages 
between  nations,  and  should,  upon  such  principles,  be 
wholly  excluded  from  the  consideration  of  the  tribunal 
in  making  its  award."  The  United  States  authorized 
their  agent  to  state  that  they  accepted  this  declaration  as 
determinative  of  the  judgment  of  the  arbitrators  on  the 
important  question  of  public  law  involved,  and  that 
these  classes  of  claims  might  be  excluded  from  considera- 
tion in  any  award  that  might  be  made. 

Subsequently,  by  protocol  27,  dated  August  29,  1872, 
a  majority  of  the  tribunal  decided  to  reject  the  claims  for 
expenditures  incurred  in  pursuit  of  the  cruisers,  on  the 
ground  that  they  were  comprised  in  the  cost  of  the  war. 

Thenceforth  there  remained  only  for  consideration  by 
the  tribunal  the  claims  for  direct  losses  growing  out  of 


DISTRIBUTION   OF   THE   GENEVA   AWARD.        229 

-  he  destruction  of  vessels  and  their  cargoes  by  the  insur- 
gent cruisers.     The  basis  of  the  award  was  further  and 
« listinctly  narrowed  down  by  the  tribunal  to  the  private 

osses  growing  out  of  the  destruction  of  vessels  and  their 

•  argoes  by  the  acts  of  the  Alabama,  the  Florida,  and  their 
enders,  and  the  Shenandoah  after  she  left  the  port  of 
vlelbourne.     In  accordance  with  this  decision  the  arbr- 
nitors  requested  the  Government  of  the  United  States  to 
'urnish  them  with  definite  information  as  to  the  amount 
>f  such  losses,  and,  complying  with  the  request,  on  the 
1 9th  of  August,  1872,  a  schedule  was  presented  in  behalf 
)f  our  Government  enumerating  specifically  the  vessels 
lestroyed  by  the  cruisers  for  whose  acts  Great  Britain  was 
aeld  to  be  liable,  showing  the  value  of  each  vessel  so 
lestroyed  and  of  her  cargo,  as  proved  by  the  claims  filed 
for  it,  including  those  of  the  insurance  companies. 

The  judgment  of  the  tribunal  was  that  there  had  been 
a  violation  of  the  obligations  of  neutrality  on  the  part  of 
Great  Britain ;  that  she  was  consequently  "  responsible 
for  the  American  ships  which  were  destroyed  by  the  ves- 
sels in  question."  In  view  of  this  decision,  the  only 
remaining  duty  of  the  tribunal  was  either  to  ascertain  and 
award  to  the  United  States  such  a  sum  in  gross  as  was 
deemed  sufficient  to  cover  those  private  losses,  as  it  was 
empowered  to  do  by  the  seventh  article  of  the  treaty,  or 
to  remit  the  duty  of  auditing  each  claim  for  the  losses  to 
a  board  of  assessors,  as  provided  in  article  10.  The 
former  was  deemed  the  most  satisfactory  course.  Its 
adoption  was  requested  on  the  part  of  this  country,  and 
the  gross  sum  of  $15,500,000  was  accordingly  awarded  to 
the  United  States.  The  majority  was  four  to  one.  The 
award,  of  course,  included  alike  such  of  the  destroyed 
vessels  as  were  insured  and  those  which  were  uninsured. 
In  determining  what  sum  in  gross  should  be  awarded,  the 
tribunal  considered  the  claims  on  the  proofs  submitted  to 
it,  those  of  the  insurance  companies  being  the  most  con- 
spicuous among  the  claims  thus  submitted. 

The  United  States  have  now  received  the  money,  have 
admitted  that  it  is  not  their  own,  and  established  a  special 
court  for  its  distribution;  but  have  closed  its  doors  against 
every  insurance  company  which  cannot  show  that  its  whole 


230       DISTRIBUTION   OF   THE   GENEVA   AWARD. 

business  during  the  four  years  of  the  war,  so  far  as  the 
war  risks  were  concerned,  was  unprofitable. 

At  this  point  it  becomes  necessary  to  consider  the 
principles  on  which  marine  insurance  is  conducted  among 
commercial  nations.  It  has  always  been  regarded  as  a 
proposition  thoroughly  established,  that  whatever  is  re- 
covered of  the  ship  or  cargo  insured  is  the  property  of 
the  insurer  who  has  paid  the  original  owner  the  value  of 
it.  It  would  be  superfluous  to  spend  time  in  proving 
this  undeniable  proposition.  Daniel  Webster  said  of  it : 

There  is  no  more  universal  maxim  of  law  and  justice  through- 
out the  civilized  and  commercial  world  than  that  an  underwriter, 
who  has  paid  a  loss  on  ship  or  merchandise  to  the  owner,  is  enti- 
tled to  whatever  may  be  received  from  the  property.  His  right 
accrues  by  the  very  act  of  payment.  And  if  the  property  or  its 
proceeds  be  afterwards  recovered  in  whole  or  in  part,  whether 
the  recovery  be  from  the  sea,  from  captors,  or  from  the  justice 
of  foreign  states,  such  recovery  is  for  the  benefit  of  the  under- 
writer. 

It  was  upon  this  principle  that  the  claims  of  our  people 
to  reparation  for  the  British  violations  of  the  laws  of 
neutrals  were  advanced  by  our  Government.  On  the 
part  of  Great  Britain,  the  justice  of  our  case  thus  urged 
was  distinctly  admitted  in  the  words — 

The  American  insurance  companies  who  have  paid  the  owners 
as  for  a  total  loss  are,  in  our  opinion,  entitled  to  be  subrogated  to 
the  rights  of  the  latter,  according  to  the  well-known  principle, 
that  an  underwriter  who  has  paid  as  for  a  total  loss,  acquires  the 
rights  of  the  assured  in  respect. of  the  subject-matter  of  insur- 
ance. 

The  principle  of  marine  insurance  requiring  that  the 
parties  who  have  paid  the  owners  in  full  for  their  losess 
shall  have  whatever  may  be  afterwards  recovered  is  seen, 
even  on  slight  reflection,  to  be  founded  on  morality  and 
justice.  It  resembles  that  involved  where  payment  of  a 
note  is  guaranteed  for  a  pecuniary  consideration,  and,  the 
maker  refusing  to  pay,  the  note  is  paid  by  the  guarantor, 
but  afterwards  collected  from  the  maker.  Obviously  the 
guarantor,  who  has  paid  the  owner  in  full,  is  entitled  to 
all  that  is  recovered.  Or,  to  take  an  illustration  yet  more 


DISTRIBUTION   OF   THE   GENEVA   AWARD.       2'M 

c  osely  analogous  to  the  ease  in  point,  a  vessel  fully  in- 
s  ired  does  not  arrive  at  the  port  when  she  is  expected. 
rl  he  parties  who  have  agreed  to  pay  for  her  in  case  of 
1-  -ss  honorably  fulfill  their  engagement,  and  fully  indem- 
11  .fy  the  owners.  Ultimately  the  vessel,  having  been  de- 
t  lined  by  unforeseen  causes,  conies  to  port.  To  whom 
does  she  belong?  Manifestly  not  to  the  original  owners. 
rl  hey  have  been  paid,  and  in  law  and  justice  have  trans- 
1  ?rred  their  claim  to  those  who  paid  them.  The  risk  has 
1  een  run,  but  there  has  been  no  loss.  Yet  further  from 
i  11  right  would  it  be  for  any  third  party,  even  the 
1  Tnited  States,  to  step  in  and,  by  the  power  of  force,  give 
1  he  vessel  to  other  parties. 

We  are  not  approaching  the  subject  of  the  disposal  of 
1  he  amount  paid  to  us  as  if  the  money  were  our  own,  to 
1  >e  given  as  we  choose.  Two-thirds  of  it  remain  undis- 
1  ributed.  It  was  awarded  for  specific  purposes  and  for 
i  ,o  others,  and  the  money  was  paid  to  the  Government  of 
<  air  country  for  parties  whose  claims  were  admitted  to 
be  just,  and  who  had  confided  them  to  the  Government 
its  their  best  and  truest  trustee. 

The  bill  reported  by  the  majority  of  the  Judiciary 
Oommittee  makes  provision  for  three  classes  of  claims. 

P'-It  provides : 
That  the  first  class  shall  be  for  claims  directly  resulting  from 
•  lamage  done  on  the  high  seas  by  Confederate  cruisers  during  the 
ate  rebellion,  including  vessels  and  cargoes  attacked  on  the  high 
*eas,  although  destroyed  within  four  miles  of  the  shore,  except  as 
provided  for  in  section  11  of  said  chapter  459.  The  second  class 
ihall  be  for  claims  for  the  payment  of  premiums  for  war  risks, 
whether  paid  to  corporations,  agents,  or  individuals,  after  the 
sailing  of  any  Confederate  cruiser.  The  third  class  shall  be  for 
claims  for  sums  actually  paid  for  insured  property  destroyed  on 
the  high  seas  by  such  Confederate  cruisers,  except  sums  for  which 
judgments  have  been  entered  under  section  12  of  said  chapter. 

That  judgments  entered  in  the  first  class  shall  be  paid  before 
judgments  of  the  second  class  are  paid  ;  and  judgments  of  the  se- 
cond class  shall  be  paid  before  judgments  of  the  third  class  are 
paid.  If  the  sum  of  money  so  unappropriated  shall  be  insuffi- 
cient to  pay  the  judgments  of  the  first  class,  they  shall  be  paid 
according  to  the  proportions  which  they  severally  bear  to  the 
whole  amount  of  such  unappropriated  sum.  If  such  sum  shall 
be  sufficient  to  pay  the  judgments  of  the  first  class,  and  uot  suffi- 


232       DISTRIBUTION    OF   THE   GENEVA   AWARD. 

cient  to  pay  the  judgments  of  the  second  class,  the  latter  judg- 
ments shall  be  paid  according  to  the  proportion  which  they  sev- 
erally bear  to  the  residue  of  such  unappropriated  sum.  If  such 
sum  shall  be  sufficient  to  pay  the  judgments  of  the  first  and 
second  classes,  and  not  sufficient  to  pay  the  judgments  of  the  third 
class,  they  shall  be  paid  according  to  the  proportions  which  they 
severally  bear  to  the  residue  of  such  unappropriated  sum  after 
the  payment  of  the  judgments  of  the  first  and  second  classes. 

The  Geneva  tribunal  adjusted  only  the  liability  of 
Great  Britain  for  the  admitted  depredations  committed 
by  the  Florida,  Alabama,  and  Shenandoah  after  leaving 
Melbourne,  and  their  tenders,  the  Tuscaloosa,  Clarence, 
Tacony,  and  the  Archer,  and  excluded  from  consideration, 
in  the  award  of  damages,  the  Georgia,  Sumter,  Nashville, 
and  other  exculpated  cruisers.  In  opposition  to  this  de- 
cision, the  bill  allows  to  be  presented  claims  resulting 
from  damage  done  on  the  high  seas  by  all  "  Confederate 
cruisers  during  tbe  late  rebellion,"  without  the  limitation 
imposed  by  the  arbitrators  and  in  direct  conflict  with  the 
intent  and  decision  of  the  chosen  tribunal. 

In  equally  bad  faith  is  the  provision  allowing  claims 
for  the  payment  of  the  premiums  on  war  risks  which  were 
distinctly  ruled  out  by  the  tribunal.  This  ruling  was  re- 
cognized and  accepted  by  the  agent  and  counsel  who  re- 
presented our  Government  at  Geneva ;  and  to  make  yet 
more  glaring  the  enormity  of  the  proposed  bill,  the  claims 
of  the  insurance  companies,  which  seem  to  come  clearly 
within  the  award,  are  placed  in  the  last  class,  without 
possibility  of  payment  after  the  wrongful  demands,  ex- 
cluded by  the  tribunal  but  placed  by  the  bill  in  the  first 
and  second  classes,  have  been  satisfied. 

The  majority  of  the  Committee  say,  with  an  evident 
desire  to  palliate  the  transparent  injustice  they  suggest 
inflicting  on  the  insurance  companies,  that  the  first  class 
of  claims  for  which  provision  is  made  in  this  bill  will 
not,  they  think,  exceed  $1,500,000,  and  the  second  class 
$5,000,000,  leaving  $4,000,000  for  the  insurers.  A  sig- 
nificant commentary  on  these  estimates  is  that  the  chair- 
man of  the  Judiciary  Committee  in  the  last  House,  who 
urged  the  same  interests  as  have  priority  in  the  report 
made  by  the  majority  of  the  present  committee,  in  answer 


DISTRIBUTION   OF   THE   GENEVA   AWARD.       233 

o  a  question  by  another  honorable  member,  replied  that 
he  bill  then  under  consideration,  and  which  is  now  a 
aw,  would  require  only  $3,000,000  to  satisfy  the  claims 
!or  which  it  provided.  As  matter  of  fact  it  has  taken 
Between  eight  and  nine  millions.  The  probability  is  that 
:he  first  two  claims  for  which  provision  is  made  in  the 
bill  reported  by  the  committee  would  swell  in  larger 
proportions. 

It  would  be  difficult  to  find  in  the  whole  history  of 
pernicious  legislation  a  precedent  more  dangerous  to 
public  and  private  integrity  than  the  perversion  of  the 
funds  our  country  has  obtained  from  Great  Britain  for 
specific  purposes,  which  were  admitted  to  be  just,  to 
other  purposes  for  which  they  were  not  and  never  would 
have  been  awarded.  There  is  no  doubt  how  the  courts 
would  decide,  and  I  regret  that  a  knowledge  that  no  court 
in  equity  would  reject  the  doctrine  of  subrogation  as 
applied  to  the  insurance  companies,  should  be  assigned 
as  a  reason  why  Congress  ought  to  take  the  matter  into 
its  own  hands  and  make  its  own  will  the  law.  It  is  bad 
enough  that  Congress  should  disregard  settled  principles 

I  and  rules  as  to  the  rights  of  property,  but  that  such  a 
doctrine  as  this  is  avowed  in  open  debate  in  this  House 
is  deeply  to  be  deplored.  Having  called  to  our  aid  in 
settling  the  claims  of  our  citizens  against  the  British  gov- 
ernment, men  of  the  most  profound  legal  knowledge  and 
the  highest  character  among  other  leading  nations  of  the 
world,  the  attention  of  civilized  mankind  is  directed 
towards  us.  The  reputation  as  well  as  the  honor  and 
honesty  of  our  country  is  at  stake,  and  if  we  fail  in  our 
duty,  we  shall  be  deemed  now  and  through  future  his- 
tory to  have  added  publicly  and  as  a  nation  a  portentous 
illustration  to  the  already  long  catalogue  of  the  too  prev- 
alent characteristics  of  the  times. 

While  the  facts  I  have  presented  are  beyond  doubt 
or  cavil,  the  considerations  which  should  regulate  our 
decisions  as  to  the  Alabama  claims  are  so  unquestionable 
as  to  be. out  of  the  region  of  debate.  I  repeat  that  the 
Government  of  our  country  obtained  the  money  through 
the  award  of  a  great  international  court  appointed  by 
the  leading  civilized  nations,  with  the  hope  not  only  of 


n 


DISTRIBUTION    OF   THE   GENEVA   AWARD. 

solving  the  difficulties  which  then  existed,  but  of  estab- 
lishing a  precedent  which  would  tend  to  promote  human 
progress  by  substituting  just  and  honorable  arbitrament 
for  settlements  through  brute  force  and  the  horrors  of 
war.  We  are  bound  to  respect  the  rulings  of  the  court ; 
and  those  whose  good  opinion  is  best  worth  deserving 
will  judge  us  by  the  disposal  we  make  of  the  funds  com- 
mitted tcrour  charge. 

Our  Government  obtained  the  award  as  damages  for 
destruction  of  the  private  property,  and  on  proofs  sup- 
plied by  its  owners.  As  the  Government  itself  never 
owned  the  property,  it  cannot  possibly  be  the  rightful 
owner  of  the  damages  or  have  any  right  to  confiscate 
them. 

In  presenting  the  claims  before  the  court  as  grounds  for 
damages,  the  Government  insisted  upon  their  validity.  If 
it  has  now  discovered  that  they  were  invalid  and  that  it 
was  an  error  to  present  them,  only  one  alternative  re- 
mains. The  plain  and  common  rules  of  honesty  and  fair 
dealing  are  as  obligatory  in  arbitraments  between  nations 
as  between  individuals ;  and  if,  after  recovery  of  dam- 
ages, the  plaintiff  nation  ascertains  or  becomes  convinced 
that  the  recovery  was  founded  on  wrong  or  error,  it  is 
bound  in  honor  and  good  faith  to  return  the  sum  improp- 
erly collected.  While  Great  Britain  would  doubtless  be 
unwilling  to  receive  again  any  part  of  the  sum  she  has 
paid  to  the  Government  of  the  United  States  under  the 
award,  she  cannot  be  expected  to  regard  without  interest 
an  alienation  of  the  money  and  its  application  to  objects 
for  which,  by  so  high  a  tribunal,  it  has  been  decided  that 
she  is  not  responsible. 

The  duty  of  the  Government,  apart  from  this  alterna- 
tive, is  plain  and  simple.  Having  received  the  money  as 
the  value  of  private  property,  it  is  bailee  or  trustee  for 
the  owners.  Repudiation  of  the  trust  or  bailment  by 
any  individual  under  the  same  circumstances  would  be 
severely  punished  in  a  court  of  justice.  The  nation  cannot 
be  sued,  but  it  is  therefore  so  much  the  more  firmly  bound 
by  higher  considerations  of  right  and  policy  to  render  no 
less  justice  than  the  private  trustee  would  be  constrained 
to  do.  All  fair  consideration  of  this  subject  leads  to  the 


DISTRIBUTION   OF   THE   GENEVA   AWARD.       235 


mme  conclusions.  The  only  just  claim  on  the  part  of 
the  Government  is  the  one  per  cent,  interest,  the  differ- 
ance  between  what  it  has  paid  and  received.  This  is 
fairly  its  right,  and  should  be  covered  into  the  Treasury. 
The  Government  ought  freely  and  promptly  to  submit 
all  claims  upon  which  the  award  wa*  based  to  proper 
audit  before  the  distributing  tribunal,  where  they  can  be 
heard  upon  their  merits  and  decided  in  accordance  with 
the  principles  of  legal  right.  No  other  course  will  afford 
substantial  or  valid  protection  to  the  national  Treasury, 
and  any  indirect  or  arbitrary  procedure  cannot  fail  to 
disgrace  our  country  in  the  estimation  of  the  whole  civi- 
lized world. 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY 
AND  ITS  IMPORTANCE  TO  THE  UNION. 


HOUSE  OP  REPRESENTATIVES,  March  31,  1858. 


At  this  time  the  bond  of  fraternity  between  the  Northern  and 
Southern  States  had  been  weakened  by  agitating  the  question  of 
slavery  in  Kansas.  Mr.  Ward  foresaw  that  the  result  might  be  a 
forcible  disturbance  of  the  harmony  of  the  Union.  He  believed 
that  no  prophetic  spirit  was  required  to  foretell  the  disastrous 
consequences  that  might  ensue,  and  hoped  to  avert  them  and  dis- 
miss the  discussion  from  the  halls  of  Congress,  by  admitting  Kan- 
sas as  a  State,  when  her  people  would  have  the  usual  power  to 
make  such  changes  as  they  may  think  proper  in  their  government, 
subject  to  the  Constitution  of  the  United  States. 

MR.  CHAIRMAN:  The  subject  of  admitting  Kansas  as  a 
State  under  the  Lecompton  Constitution  has  been  so  fully 
and  ably  discussed  by  the  distinguished  members  of  this 
honorable  body,  that  no  new  view  can  be  presented  of  the 
immediate  points  in  issue.  It  has  occupied  the  attention 
of  Congress  until,  I  am  sure,  the  whole  country  must  be 
wearied  of  the  discussion.  It  is  a  matter  of  deep  regret 
that  so  large  a  portion  of  the1  time  of  this  Congress  has 
been  thus  absorbed.  The  nation,  has  just  passed  through  one 
of  those  periodical  financial  revulsions  which  result  from 
inflated  issues  of  bank  paper,  overtrading,  and  speculation, 
leaving  thousands  in  hopeless  bankruptcy,  all  branches 
of  industry  arrested,  and  commerce  paralyzed ;  and  yet 
nearly  four  months  of  the  session  are  gone  and  not  one 
effort  has  been  made,  one  word  of  hope  or  consolation 
uttered,  or  any  measure  of  relief  brought  forward  in 
Congress  that  exhibits  an  interest,  or  sympathy  even, 
with  those  upon  whom  calamity  has  fallen  so  heavily. 
A  sectional  and  political  excitement  has  been  engendered, 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     237 

which,  while  it  may  not  precipitate  a  dissolution  of  the 
Union,  weakens  that  bond  of  fraternal  intercourse  which 
should  always  exist  between  different  sections  of  our 
common  country.  My  position  was  early  taken  from  a 
deep  conviction  of  duty  to  the  nation  and  my  party  ;  my 
constituents  have  left  me  free  to  take  such  a  course  as  my 
judgment  dictated  ;  and  whether  I  meet  with  their  appro- 
bation or  not,  I  know  they  will  accord  to  me  an  honesty 
of  intention  and  a  rectitude  of  purpose.  While  my  own 
immediate  constituents  have  confided  in  my  judgment,  I 
have  not  been  unmindful  that  the  united  democracy  of 
the  city  of  New  York,  of  which  my  district  is  a  part,  and 
the  local  organizations,  have  cordially  approved  of  the 
action  of  their  Representatives  who  sustain  the  admission 
of  Kansas  under  the  Lecompton  Constitution  ;  that  the 
democratic  press,  the  democratic  members  of  the  Legis- 
lature, and  the  leading  men  of  their  party  present  an  un- 
broken front  in  support  of  the  Administration,  and  ex- 
hibit a  unity  of  action  that  has  not  been  witnessed  in  our 
State  for  many  years  upon  any  other  prominent  public 
question. 

In  addition  to  this  concentration  of  public  opinion,  I 
have  not  been  insensible  to  other  influences.  The  city  of 
New  York  is  the  largest  commercial  city  in  the  Union. 
In  1856-57,  five-eighths  of  the  total  imports  into  the 
United  States  were  imported  into  that  city ;  one-third  of 
the  exports,  one-third  of  the  domestic  produce,  and  over 
one-half  of  the  foreign  produce,  were  exported  therefrom  ; 
and  there  were  collected  at  the  custom-house  there  within 
the  same  time,  forty-three  and  a  half  millions  of  dollars 
upon  dutiable  imports ;  its  banking  capital,  exclusive  of 
that  of  private  bankers,  in  1857,  amounted  to  sixty -five 
and  a  half  millions,  and  it  also  has  many  more  invested  in 
other  corporations,  and  in  domestic  manufacture  and 
trade.  These,  too,  are  but  a  part  of  the  vast  interests 
that  centre  there.  These  sources  of  wealth,  power,  and 
greatness  cannot  but  suffer  by  the  continued  agitation  of 
this  Kansas  question,  ending  as  it  may  in  disturbing  the 
harmony  of  the  Union,  without  resulting  in  any  practical 
good  to  the  persons  the  slavery  agitators  desire  to  benefit. 

It  is  not  to  be  denied  that  we  are  a  commercial  people, 


238     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

and  that  to  commerce  we  are  indebted  for  our  advance- 
ment, growth,  and  prosperity  as  a  nation.  The  majestic 
vessels  which  carry  our  products  to  other  climes,  pene- 
trating every  sea-port,  bear  with  them  civilization,  and 
instruct  other  nations  that  a  power  here  exists  that  can- 
not be  disregarded.  The  commercial  prosperity  of  my 
city,  the  whole  country,  the  onward  progress  of  commerce, 
and  the  agricultural  and  the  other  departments  of  indus- 
try, are  involved  in  the  public  questions  which  from  time 
to  time  agitate  the  country.  Impressed  with  the  value 
and  importance  of  the  Union  to  my  constituents,  I  find 
reasons,  in  addition  to  party  considerations,  for  pursuing 
the  course  best  calculated  to  end  the  present  agitation, 
and  once  more  restore  amity  and  good  feeling.  No  one 
who  has  observed  closely  the  events  in  Kansas  for  the 
last  few  years  can  fail  to  trace  to  its  proper  source  the 
present  excitement,  and  perceive  the  urgent  necessity  of 
investing  the  people  of  that  Territory  with  the  rights  of 
sovereignty,  so  that  they  may  exercise  the  functions  of  a 
State  government,  and  relieve  Congress  from  further  in- 
terference. No  analogy  can  be  drawn  between  the  griev- 
ances of  the  American  colonies  prior  to  the  Revolution, 
as  attempted  by  my  colleague  [Mr.  HASKIN],  and  the  al- 
leged complaints  of  a  part  of  the  people  in  Kansas.  In 
the  former  case,  Great  Britain  persisted  in  controlling 
local  affairs ;  and  in  the  latter,  Congress  desires,  in  the 
most  speedy  way,  to  confer  all  power  upon  the  citizens  of 
that  Territory  to  manage  their  own  affairs  in  their  own 
way,  subject  to  the  Constitution  of  the  United  States. 

Mr.  Chairman,  from  the  course  the  debate  has  taken, 
an  apprehension  would  prevail  with  those  riot  cognizant 
of  the  facts  that  a  foul  and  deep  wrong  was  about  to  be 
perpetrated  upon  the  people  of  Kansas ;  that  the  provi- 
sions of  the  Kansas-Nebraska  act  were  to  be  violated,  and 
the  platform  adopted  at  the  Cincinnati  Convention  relat- 
ing to  the  question  of  slavery  ignored.  To  demonstrate 
that  this  is  mere  clamor,  it  is  proper  that  I  should  briefly 
refer  to  a  few  antecedent  events.  The  act  referred  to, 
passed  in  1854,  has  this  provision  : 

"  When  admitted  as  a  State,  the  said  Territory  or  any  portion 
of  the  same,  shall  be  received  into  the  Union,  with  or  without 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     239 

ilavery,  as  their  constitution  may  prescribe  at  the  time  of  their 
idmiasion  ;  it  being  the  true  intent  and  meaning  of  this  act  not 
ro  legislate  slavery  into  any  State  or  Territory,  nor  to  exclude  it 
rherefrom,  but  to  leave  the  people  thereof  perfectly  free  to  form 
and  regulate  their  domestic  institutions  in  their  own  way,  sub- 
ject only  to  the  Constitution  of  the  United  States." 

The  territorial  government  of  Kansas  was  organized 
under  the  act  containing  this  section.  The  resolutions  of 
the  Cincinnati  Convention,  relating  to  slavery  and  territo- 
rial organization,  were  as  follows  : 

"  And  that  we  may  more  distinctly  meet  the  issue  on  which  a 
sectional  party,  subsisting  exclusively  on  slavery  agitation,  now 
relies  to  test  the  fidelity  of  the  people,  North  and  South,  to  the 
Constitution  and  the  Union — 

"  1.  Resolved,  That  claiming  fellowship  with,  and  desiring  the 
co-operation  of,  all  who  regard  the  preservation  of  the  Union  un- 
der the  Constitution  as  the  paramount  issue — and  repudiating  all 
sectional  parties  and  platforms  concerning  domestic  slavery, 
which  seek  to  embroil  the  States,  and  incite  to  treason  and  armed 
resistance  to  law  in  the  Territories  ;  and  whose  avowed  purposes, 
if  consummated,  must  end  in  civil  war  and  disunion — the  Amer- 
ican democracy  recognize  and  adopt  the  principles  contained  in 
kthe  organic  laws  establishing  the  Territories  of  Kansas  and  Ne- 
braska as  embodying  the  only  sound  and  safe  solution  of  the  slav- 
ery question  upon  which  the  great  national  idea  of  the  people  of 
tliis  whole  country  (ran  repose  in  its  determined  conservatism  of 
the  Union — NON-INTKKI-T.KKNCE  BY  CONGRESS  WITH  SLAVERY  IN 
STATK  AND  TERRITORY,  OR  IN  THE  DISTRICT  OF  COLUMBIA. 

|u  2.  That  this  was  the  basis  of  the  compromises  of  1850,  con- 
firmed by  both  the  democratic  and  whig  parties  in  national  con- 
ventions, ratified  by  the  people  in  the  election  of  1852,  and  right- 
ly applied  to  the  organization  of  Territories  in  1854. 
"  3.  That  by  the  uniform  application  of  this  democratic  prin- 
ciple  to  the  organization  of  Territories,  and  to  the  admission  of 
new  States,  with  or  without  domestic  slavery,  as  they  may  elect, 
the  equal  rights  of  all  the  States  will  be  preserved  intact,  the  origi- 
nal compacts  of  the  Constitution  maintained  inviolate,  and  the 
perpetuity  and  expansion  of  this  Union  insured  to  its  utmost  ca- 
pacity of  embracing,  in  peace  and  harmony,  every  future  Ameri- 
can State  that  rray  be  constituted  or  annexed  with  a  republican 
•  form  of  government. 
"  Itesolv&l,  That  we  recognize  the  rights  of  the  people  of  all 
the  Territories,  including  ICaiisas  and  Nebraska,  acting  through 
the  legally  and  fairly  expressed  will  of  a  majority  of  actual  resi- 
dents, ami  whenever  the  number  of  their  inhabitants  justifies  it,  to 


240     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

form  a  constitution,  with  or  without  domestic  slavery,  and  be  ad- 
mitted into  the  Union  upon  terms  of  perfect  equally  with  the 
other  States." 

It  will  be  observed  that  neither  the  act  nor  resolution 
contemplated  that  the  constitution  of  Kansas  should  be 
submitted  to  the  people.  They  intended,  unquestionably, 
that  the  people  should  have  power  to  "  regulate  their 
domestic  institutions,"  but  whether  through  a  submission 
or  a  convention  was  left  undetermined.  A  sentiment  and 
feeling,  however,  grew  up  during  the  canvass  that  the 
slavery  clause  should  be  submitted,  and  was  acquiesced 
in,  which  would  have  been  a  full  compliance  with  the  act 
and  the  platform,  leaving  the  constitution  otherwise  to 
be  formed  in  such  manner  as  the  people  judged  best.  I 
do  not  mention  these  facts  as  approbatory  of  non-submis- 
sion, for  I  should  have  preferred  that  the  whole  consti- 
tution had  been  voted  upon.  But  whether  that  could  or 
could  not  have  been  done,  it  rested  with  the  people  and 
the  convention  to  decide.  Such  has  been  the  uniform 
practice,  I  believe,  relating  to  the  territorial  action  for 
the  admission  of  new  States,  except  when  controlled  by- 
legislative  action.  I  mention  this  because  my  colleague 
[Mr.  HASKIN]  has  sought  to  create  the  impression  that 
the  question  of  submission  of  the  whole  constitution  en- 
tered into  the  last  presidential  campaign  as  a  distinct 
issue.  Whatever  individuals  rnay  have  done,  I  assert 
that  it  was  not  then  made  a  part  of  the  democratic 
creed.  In  confirmation  of  this  position  I  cite  the  follow- 
ing passage  from  the  address  -of  acting-Governor  Stanton, 
under  date  of  April  17,  1857  : 

"  The  government  especially  recognizes  the  territorial  act  which 
provides  for  assembling  a  convention  to  form  a  constitution  with 
a  view  to  making  application  to  Congress  for  admission  as  a  State 
into  the  Union.  That  act  is  regarded  as  presenting  the  only  test 
of  the  qualification  of  voters  for  delegates  to  the  convention,  and 
all  preceding  repugnant  restrictions  are  thereby  repealed.  In  this 
light  the  act  must  be  allowed  to  have  provided  for  a  full  and  fair 
expression  of  the  will  of  the  people,  through  the  delegates  who 
may  be  chosen  to  represent  them  in  the  constitutional  convention. 
I  do  not  doubt,  however,  that,  in  order  to  avoid  all  pretext  for  re- 
sistance to  the  peaceful  operation  of  this  law,  the  convention  itself 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

oill,  in  some  form^  provide  for  submitting  the  great  distracting 
'uestion  regarding  their  social  institution,  which  has  so  long 
imitated  the  people  of  Kansas,  to  a  fair  vote  of  all  the  actual  lona 

,  lide  residents  of  the  Territory,  with  every  possible  security  against 

raud  and  violence.     If  the  constitution  be  thus  framed,  and  the 

'uest'wn  of  difference  thus  submitted  to  the  decision  of  the  people, 

believe  that  Kansas  will  be  admitted  by  Congress  without  delay 

;  -s  one  of  the  sovereign  States  of  the  American  Union,  and  the 
erritoriaJ  authorities  will  be  immediately  withdrawn." 

This  question  of  submission  has  recently  arisen,  and 
las  been  seized  upon  since  the  commencement  of  this 
Jongress,  and  made  the  basis  for  assailing  the  President 
>f  the  United  States  for  an  honest  and  patriotic  discharge 
)f  his  high  duties.  The  President,  in  his  instructions  to 
governor  Walker,  neither  intended  nor  expected  that 
my  other  question  than  that  of  slavery  was  to  be  sub- 
nitted.  In  his  message  transmitting  the  Lecompton  Con- 
stitution to  Congress,  he  says : 

"  No  person  thought  of  any  other  question.  For  my  own  part, 
•vhen  I  instructed  Governor  Walker,  in  general  terms,  in  favor 
>f  submitting  the  constitution  to  the  people,  I  had  no  object  in 
/iew  except  the  all-absorbing  question  of  slavery.  In  what  man- 
ler  the  people  of  Kansas  might  regulate  their  other  concerns 
,vas  not  a  subject  which  attracted  my  attention.  In  fact,  the 
general  provisions  of  our  recent  State  constitutions,  after  an  ex- 
perience of  eighty  years,  are  so  similar  and  so  excellent  that  it 
.vould  be  difficult  to  go  far  wrong  at  the  present  day  in  framing 
i  new  constitution. 

"  I  then  believed,  and  still  believe,  that,  under  the  organic  act, 
;he  Kansas  Convention  were  bound  to  submit  this  all-important 
picstion  of  slavery  to  the  people.  It  was  never,  however,  my 
Dpinion  that,  independently  of  this  act,  they  would  have  been 
bound  to  submit  any  portion  of  the  constitution  to  a  popular  vote, 
in  order  to  inve  it  validity.  Had  I  entertained  such  an  opinion, 
this  would  have  been  in  opposition  to  many  precedents  in  our 
history,  commencing  in  the  very  best  age  of  the  Republic.  It 
would  have  been  in  opposition  to  the  principle  which  pervades 
our  constitutions,  and  which  is  every  day  carried  out  into  prac- 
tice, that  the  people  have  the  right  to  delegate  to  representatives, 
chosen  by  themselves,  their  sovereign  power  to  frame  constitu- 
tions, enact  laws,  and  perform  many  other  important  acts,  without 
requiring  that  these  should  be  subjected  to  their  subsequent  ap- 
probation. It  would  be  a  most  inconvenient  limitation  of  their 
wn  power,  imposed  by  the  people  upon  themselves,  to  exclude 
16 


242     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

them  from  exercising  their  sovereignty  in  any  lawful  manner 
they  think  proper.  It  is  true  that  the  people  of  Kansas  might, 
if  they  had  pleased,  have  required  the  convention  to  submit  the 
constitution  to  a  popular  vote  ;  but  this  they  have  not  done.  Tiie 
only  remedy,  therefore,  in  this  case,  is  that  which  exists  in  all 
other  similar  cases.  If  the  delegates  who  framed  the  Kansas  Con- 
stitution have  in  any  manner  violated  the  will  of  their  constitu- 
ents, the  people  always  possess  the  power  to  change  their  constitu- 
tion or  their  laws,  according  to  their  own  pleasure." 

The  alleged  grievance  of  the  republicans  in  Kansas, 
arising  out  of  the  non-submission,  is  not  of  such  a  char- 
acter as  would  authorize  us  to  reject  the  admission  of 
Kansas  as  a  State  under  the  Lecompton  Constitution. 
They  had  also  an  opportunity  to  vote  for  delegates  to 
form  the  constitution,  when  that  instrument  was  sub- 
mitted with  slavery  or  without  slavery,  and  they  refused 
to  exercise  the  right.  But  it  is  urged  that  they  could 
not  vote  for  or  against  slavery  without  voting  for  the 
constitution.  Admitting  this,  I  would  ask,  who  are  to 
blame  ?  Surely  those  who  abstained  from  exercising  the 
right  of  popular  sovereignty  when  the  delegates  were 
elected  to  the  constitutional  convention.  Here  is  a  wil- 
ful and  repeated  determination  by  them  not  to  take  part 
in  any  proceeding  which  recognized  the  Territorial  Leg- 
islature ;  and  this  omission,  in  my  judgment,  estops  them 
from  any  claim  upon,  or  right  to,  our  sympathies.  Gov- 
ernor Walker,  in  referring  to  the  selection  of  delegates, 
distinctly  warns  them  what  would  be  the  consequences 
if  they  should  not  participate  in  the  election.  He  says : 

"  The  people  of  Kansas,  then,  are  invited  by  the  highest  au- 
thority known  to  the  Constitution  to  participate  freely  and  fairly 
in  the  election  of  delegates  to  frame  a  constitution  and  State  gov- 
ernment. The  law  has  performed  its  entire  appropriate  function 
when  it  extends  to  the  people  the  right  of  suffrage,  but  it  cannot 
compel  the  performance  of  that  duty.  Throughout  our  whole 
Union,  however,  and  wherever  free  government  prevails,  those 
who  abstain  from  the  exercise  of  the  right  of  suffrage  authorize 
those  who  do  vote  to  act  for  them  in  the  contingency,  and  the 
absentees  are  as  much  bound  under  the  law  and  constitution, 
where  there  is  no  fraud  or  violence,  by  the  act  of  the  majority  of 
those  who  do  vote,  as  if  all  had  participated  in  the  election. 
Otherwise,  as  voting  must  be  voluntary,  self-government  would 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     243 

be  impracticable,  and  monarchy  or  despotism  would  remain  as  the 
only  alternative." 

This  is  the  true  doctrine,  and  I  have  never  heard  it 
questioned.  I  firmly  believe  that,  judging  by  the  past 
acts  of  the  republicans  of  that  Territory,  if  this  constitu- 
tion be  sent  back  the  same  obstinacy  and  difficulty  will 
exist.  It  was  their  deliberate  intention  that  the  constitu- 
tion should  be  presented  here  with  slavery  to  keep  up  that 
excitement,  and  to  further  aid  and  abet  those  who  seek 
to  break  down  the  democratic  party,  and  this  honorable 
body  will  fail  to  assert  its  rights  and  protect  its  dignity 
in  permitting  its  attention  longer  to  be  occupied  with  this 
subject  and  these  local  contentions. 

The  motives  and  acts  of  the  republicans  have  been 
such  as  cannot  be  recognized  without  overturning  all 
government,  law,  and  order.  The  evidence  is  unques- 
tioned and  overwhelming,  that  they  have  been  in  a  state 
of  rebellion  to  the  government  since  the  meeting  was  con- 
vened on  the  14th  or  15th  of  August,  1855,  which  resulted 
in  the  convention,  held  the  19th  September  of  that  year, 
which  framed  the  Topeka  Constitution,  to  be  put  in 
operation  in  subversion  of  the  territorial  government 
established  under  the  authority  of  Congress.  The  or- 
ganization under  that  instrument,  the  assembly  of  its 
Legislature,  its  acts,  the  presentation  of  that  constitution 
to  Congress,  the  passage  of  the  bill  admitting  Kansas  a 
State  under  it  by  the  republican  members  of  the  House 
of  Representatives,  and  its  rejection  by  the  Senate,  the 
creation  of  armed  forces  in  Kansas  to  sustain  this  revolu- 
tionary movement,  are  now  matters  of  history.  These 
occurrences  demonstrate  the  position  I  assume,  and  which 
is  sustained  by  the  President  in  his  message,  February  2, 
1858: 

"  This  government  [territorial]  would  long  since  have  been  sub- 
verted had  it  not  been  protected  from  their  "assaults  by  the  troops 
of  the  United  States.  Such  has  been  the  condition  of  affairs  since 
my  inauguration*  Ever  since  that  period,  a  large  portion  of  the 
people  of  Kansas  have  been  in  a  state  of  rebellion  against  the 
u<> \vrnment,  with  a  military  leader  at  their  head  of  a  most  tur- 
bulent and  dangerous  character.  They  have  never  acknowledged, 


244     NATIONALITY  OF  THE  DEMOCRAT  CO  PARTY. 

but  have  constantly  renounced  and  defied,  the  government  to 
•vhich  they  owe  allegiance,  and  have  been  all  the  time  in  a  state 
of  resistance  against  its  authority.  They  have  all  the  time  been 
endeavoring  to  subvert  it,  and  to  establish  a  revolutionary  govern- 
ment, under  the  so-called  Topeka  Constitution,  in  its  stead.  Even 
at  this  very  moment  the  Topeka  Legislature  is  in  session." 

Again  he  says : 

"  The  truth  is,  that,  up  till  the  present  moment,  the  enemies  of 
the  existing  government  still  adhere  to  their  Topeka  revolutionary 
constitution  and  government.  The  very  first  paragraph  of  the 
message  of  Governor  Robinson,  dated  the  7th  of  December,  to  the 
Topeka  Legislature,  now  assembled  at  Lawrence,  contains  an  open 
defiance  or  the  Constitution  and  laws  of  the  United  States.  The 
Governor  says :  '  The  convention  which  framed  the  constitution 
at  Topeka  originated  with  the  people  of  Kansas  Territory.  They 
have  adopted  and  ratified  the  same  twice  by  a  direct  vote,  and 
also  indirectly  through  two  elections  of  State  officers  and  mem- 
bers of  the  State  Legislature;  yet  it  has  pleased  the  Administra- 
tion to  regard  the  whole  proceeding  as  revolutionary.' 

u  This  Topeka  government,  adhered  to  with  such  treasonable 
pertinacity,  is  a  government  in  direct  opposition  to  the  existing 
government  prescribed  and  recognized  by  Congress.  It  is  a  usur- 
pation of  the  same  character  as  it  would  be  for  a  portion  of  the 
people  of  any  State  of  the  Union  to  undertake  to  establish  a  sepa- 
rate government,  within  its  limits,  for  the  purpose  of  redressing 
any  grievance,  real  or  imaginary,  of  which  they  might  complain, 
against  the  legitimate  State  government.  Such  a  principle,  if 
carried  into  execution,  would  destroy  all  lawful  authority  and 
produce  universal  anarchy." 

In  these  revolutionary  acts  may  be  discerned  the  object 
of  the  republicans,  and  that 'is,  to  agitate  until  the  To- 
peka Constitution  is  accepted.  This  cannot  be  done  so 
long  as  Congress  recognizes  the  legitimacy  of  territorial 
organization,  and  it  would  be  subversive  of  the  funda 
mental  principles  of  our  Government.  The  question  then 
arises,  does  the  Lecompton  'Constitution  come  to  us  in  a 
legal  form  ?  The  only  mode  in  which  a  people  of  a  Terri- 
tory can  form  their  constitution,  or  alter  it  when  a  State, 
is  through  the  Legislature.  This  is  the  proper  manner  of 
ascertaining  the  popular  will.  Applying  this  rule  to 
Kansas,  we  find  that  the  Kansas-Nebraska  act  left  the 
"  people  of  the  Territory  perfectly  free  to  form  and  regu- 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     245 

late  their  domestic  institutions  in  their  own  way,  subject 
only  to  the  Constitution  of  the  United  States."  Acting 
upon  the  power  thus  conferred,  proceedings  were  had 
authorizing  the  election  of  delegates  to  form  a  constitu- 
tion. Such  election  was  held ;  the  convention  assembled 
at  Lecomptou,  and  adopted  the  constitution  now  presented 
to  us  for  our  action.  I  have  already  disposed  of  the  objec- 
tion that  but  a  small  part  of  the  voters  exercised  their 
right.  The  questions  then  arise,  what  can  and  should 
Congress  do  in  the  premises,  and  what  power  does  it 
possess  ? 

The  Constitution  provides  that  new  States  may  be  ad- 
mitted by  the  Congress  into  this  Union,  and  "  the  United 
States  shall  guarantee  to  every  State  in  this  Union  a 
republican  form  of  government."  The  Lecompton  Con- 
stitution is  legally  framed,  presented,  and  is  republican 
in  form,  and  the  Territory  should  be  admitted  at  once  as 
a  State  under  the  power  thus  conferred.  It  has  been 
urged  that  even  if  a  part  of  the  people  would  not  vote, 
they  should  still  be  protected  against  their  own  wrongful 
omission.  I  am  free  to  say,  Mr.  Chairman,  that  I  should 
feel  reluctant  to  participate  in  any  act  that  would  inflict 
a  wrong  upon  the  citizens  of  Kansas,  and  would  not  do 
it  knowingly.  I  would  not  vote  for  a  measure  that  I 
believed  would  fasten  upon  them  a  permanent  constitu- 
tion that  could  not  be  altered  or  amended ;  but,  sir,  I  can 
see  no  wrong  in  giving  them  a  republican  constitution, 
and  conferring  upon  Kansas  the  powers  of  a  sovereign 
State.  I  have  examined  the  provisions  of  that  constitu- 
tion, and  find  it  is  as  democratic  as  that  of  other  States. 
The  following  liberal  provision  is  in  the  bill  of  rights : 

u  All  political  power  is  inherent  in  the  people,  and  all  free 
trovornments  are  founded  on  their  authority,  and  instituted  for 
their  benefit;  and  therefore  they  have  at  all  times  an  inalienable 
and  indefeasible  right  to  alter,  reform,  or  abolish  their  form,  of 
government  in  such  manner  as  they  may  think  proper." 

This  is  a  full  reservation  of  power  by  the  people,  ex- 
cept so  far  as  its  exercise  is  restricted  by  the  constitution. 
'Faking  the  position  I  have,  that  an  alteration  of  such  an 
instrument  can  only  be  effected  by  legislative  action,  ex- 


246     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

cept  in  case  of  revolution,  and  believing,  with  the  late 
lamented  Webster,  the  great  expounder  of  constitutional 
law,  "that  no  single  constitution  has  ever  been  gotten  up 
by  mass  meetings,"  that  "  there  must  be  some  mode  of 
ascertaining  the  public  will,  somehow  and  somewhere  ;" 
and,  "  if  not,  it  is  a  government  of  the  strongest  and 
most  numerous,"  I  can  only  recognize  the  right  of  the 
people  of  Kansas  to  change  their  constitution  in  the 
manner  prescribed  thereby.  If  Kansas  be  admitted  under 
the  Lecompton  Constitution,  can  it  be  altered  ?  and,  if  so, 
when  ?  It  provides  for  a  change  as  follows  : 


C.  14.  After  the  year  1864,  whenever  the  Legislature  shall 
think  it  necessary  to  amend,  alter,  or  change  this  constitution, 
they  shall  recommend  to  the  electors  at  the  next  general  election, 
two-  thirds  of  the  members  of  each  House  concurring,  to  vote  for 
or  against  calling  a  convention  ;  and  if  it  shall  appear  that  a 
majority  of  all  the  citizens  of  the  State  have  voted  for  a  con- 
vention, the  Legislature  shall,  at  its  next  regular  session,  call 
a  convention,"  etc. 

It  seems  to  me  that  this  section  (and  I  give  it  as  my 
opinion  only)  takes  effect  infutwro,  and  that,  until  1864, 
there  is  no  restriction  that  can  prevent  a  prior  alteration. 
I  shall  not  occupy  the  attention  of  the  committee  in  elu- 
cidating this  point  —  it  has  already  been  ably  done,  and 
especially  by  my  friend  the  honorable  member  from  Penn- 
sylvania [Mr.  PHILLIPS].  I  presume  it  will  not  be  dis- 
puted that,  if  Congress  or  a  State  Legislature  pass  a  law 
to  take  effect  on  and  after  such  a  day  (named),  or  after 
such  a  time,  it  cannot  take  effect  or  become  operative 
until  the  period  designated  has  expired.  The  same  rule 
would  apply  to  a  constitutional  provision.  The  Topeka 
Constitution  has  the  following  : 

"  SEC.  4.  No  convention  for  the  formation  of  a  new  constitution 
shall  be  called,  and  no  amendment  to  the  constitution  shall  be, 
by  the  General  Assembly,  made,  before  the  year  1865,  nor  more 
than  once  in  five  years  thereafter." 

This  contained  a  restraint  or  restriction  that  would 
become  immediately  operative. 

The  State  of  New  York  illustrates,  in  her  action,  the 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     247 

effect  of  both  provisions.  The  constitution  of  that  State, 
>f  1777,  contained  no  provision  for  its  amendment,  The 
Legislature,  in  1821,  passed  a  law  submitting  to  the  peo- 
)le  the  propriety  of  amending  the  constitution.  They 
•esponded  in  the  affirmative.  The  convention  which  as- 
HMiibled,  instead  of  amending  the  old  one,  framed  a  new 
•institution,  which  was  accepted.  The  one  thus  formed 
•ontained  a  clause  directing  the  mode  of  changing  it.  In 
1846,  contrary  to  the  restriction,  the  people,  through  the 
Legislature,  called  another  convention,  and  formed  the 
existing  constitution. 

Mr.  Chairman,  no  serious  objections  are  urged,  I  be- 
lieve, against  any  other  part  of  this  constitution  except 
the  slavery  provision,  or  point  raised  except  as  to  the  pro- 
vision relating  to  an  amendment.  It  may  be  said  to  have 
been  recognized  in  solemn  form  by  the  whole  people  of 
that  Territory ;  for,  after  the  constitution  was  framed,  an 
election  was  ordered  and  held  under  its  provisions  for  the 
election  of  State  officers  and  the  Legislature.  In  law, 
this  is  an  estoppel,  and  amounts  to  an  assent. 

Suppose,  sir,  that  instrument  could  not  be  altered 
before  1864 ;  what  injury  would  result  there  by  to  the 
party  that  desire  it  to  be  a  free  State  ?  None.  It  is  con- 
ceded that  there  are  now  in  Kansas  but  about  one  hun- 
dred and  sixty  slaves.  With  a  supposed  free-State  ma- 
jority in  the  Territory,  with  climate  and  soil  adverse  to 
the  permanent  existence  of  slavery,  I  do  not  believe  that 
Southern  gentlemen  would  desire  to  take  their  slaves 
there,  so  that  the  present  number  would  not  be  greatly 
increased  before  the  people  could  amend  their  constitu- 
tion. The  public  welfare,  the  repose  of  the  nation,  and, 
indeed,  every  consideration  that  can  influence  the  patriot 
and  lover  of  his  country,  demand  that  this  subject  should 

hbe  promptly  dismissed  from  the  halls  of  Congress.  Kan- 
sas admitted,  and  her  people  will  then  adjust  their  own 
internal  affairs,  peace  be  restored,  a  more  natural  and 
healthy  flow  of  immigration  than  that  sent  forward  by 
the  emigrant  aid  societies  will  occur,  and  peaceful  pur- 
suits be  cultivated,  instead  of  threatening  warlike  arma- 
ments. If  Kansas  be  not  admitted,  the  excitement  now 
pervading  the  country  will  be  continued,  the  subject  will 


248     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

again  be  presented  at  the  next  session  of  Congress,  im- 
peding all  legislation,  and  perhaps  at  the  following  one  ; 
with  each  protraction  the  waves  of  angry  and  embittered 
feeling  rolling  higher  and  higher.  It  does  not  require  a 
prophetic  spirit  to  foretell  the  disastrous  consequences 
that  may  ensue. 

Political  history  presents  curious  phases.  It  shows 
the  members  of  the  opposition  party  to  have  opposed 
all  the  leading  measures  of  the  democratic  party  in 
times  gone  by,  until  public  sentiment  indicated  their 
adoption  as  part  of  the  public  policy  of  the  country,  and, 
after  being  driven  from  point  to  point,  they  sought  shel- 
ter under  the  slavery  agitation,  in  which  refuge  they  now 
remain,  pressing  it  on  regardless  of  consequences  to  the 
Union.  In  the  last  Congress  they  were  the  opponents  of 
non-intervention,  or  popular  sovereignty,  and  in  favor  of 
Congressional  interference,  and  opposed  to  an  enabling 
act ;  now  we  find  them  in  favor  of  an  enabling  act  and 
in  favor  o£  popular  sovereignty,  and  what  the  next  phase 
may  be  to-morrow  may  determine;  it  is  not  unlikely 
that  we  may  find  them  voting  for  the  admission  of  a 
slave  State.  They  have  the  warmest  sympathy  for 
"  bleeding  Kansas,"  and  cry  fraud  !  fraud  !  and  charge 
high  crimes  upon  the  democratic  party ;  but  they  have 
none  for  the  great  city  of  New  York,  whose  vested  rights 
were  ruthlessly  invaded  by  a  republican  Legislature,  and 
stripped  of  many  of  its  chartered  privileges,  to  give  spoils 
and  patronage  to  their  adherents.  I  have  been  taught  to 
believe  that  "  charity  begins  at  home." 

Another  singular  spectacle  is  presented :  we  find  sev- 
eral honorable  members,  who  fought  side  by  side  with  us 
in  the  great  political  battle  which  resulted  in  the  recog- 
nition of  non-intervention  in  local  affairs  of  Territories, 
recently  voting  for  the  appointment  of  a  special  commit- 
tee to  intervene  in  its  worst  form  in  the  domestic  affairs 
of  a  Territory.  Among  the  latter  I  find  my  colleague 
[Mr.  HASKIN].  -It  was  with  feelings  of  regret  and  mor- 
tification that  I  heard  him  utter  the  following  language  : 

"  In  arriving  at  the  conclusion  to  vote  against  the  admission  of 
Kansas  under  the  Lecompton  Constitution,  I  have  been  aided  and 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     249 

nfluenced  by  a  desire  to  faithfully  represent  the  constituency 
diich  elected  me,  and  to  fulfil  the  pledges  which  I  made  them 
ipon  accepting  my  nomination.  To  them  I  am  responsible  for 
ny  course  here ;  and  being  honestly  convinced  that  my  opposi- 
ion  to  the  admission  of  Kansas  under  the  Lecompton  Constitu- 
ion — repudiated  and  protested  against,  as  it  is,  by  at  least  three- 
•oiirths  of  her  people — meets  with  the  approval  of  a  large 
najority  of  my  constituents,  whose  wishes  I  am  in  honor  bound 
£>  obey,  I  shall  vote  against  the  admission  of  Kansas  under  the 
Lecompton  Constitution." 

The  honorable  member  represents  the  counties  of 
Westchester,  Rockland,  and  Putnam.  I  was  born  on 
the  banks  of  the  noble  Hudson,  in  the  county  of  West- 
Chester;  the  traditions  of  the  home  of  my  family  clus- 
tered around  and  have  been  identified  with  it  for  more 
than  a  century ;  my  early  life  was  spent  in  rambling 
among  the  rocks,  hills,  and  dales  of  that  beautiful  region, 
until  they  became  familiar  as  household  words.  It  is 
classic  ground,  hallowed  by  the  footsteps  of  the  Father 
of  his  Country  and  his  compeers ;  the  scene  of  some  of 
the  most  important  events  of  the  war  of  independence. 
Revolutionary  patriots  now  sleep  the  sleep  of  death  be- 
neath its  green  sod ;  and  there  rest,  too,  the  remains  of 
Paulding  (and  his  associates),  the  capturer  of  Andre, 
whose  last  request  to  his  medical  attendant  was,  "  Please 
tell  all  those  who  ask  after  me  that  I  die  a  true  democratic 
republican,"  and  whose  descendant  my  colleague  so  re- 
cently defended  on  this  floor.  Surrounded  by  such  asso- 
ciations, the  democracy  of  that  section  cannot,  will  not 
falter  in  a  crisis  like  this ;  and  I  am  justified  in  saying 
that  my  colleague  does  not  represent  the  wishes  of  the 
constituents  who  honored  him  with  his  election.  Public 
meetings  have  been  held  in  the  several  counties  of  the 
district,  condemning  his  course,  and  the  democratic  press 
is  unanimous  against  it.  My  colleague  will  bear  in  mind 
that  his  predecessor,  in  1854,  voted  against  the  Kansas- 
Nebraska  bill  in  opposition  to  the  wishes  of  his  constitu- 
ents. He  boasted  that  he  could  be  returned  upon  that 
vote ;  not  being  nominated,  he  ran,  in  1856,  as  an  inde- 
pendent candidate,  and  received  so  small  a  number  of 
votes  that  I  did  not  find  his  name  mentioned  in  the  offi 


ii 


250     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

cial  canvass.  Whether  my  colleague  is  to  share  the  same 
fate  remains  to  be  seen.  While  I  desire  that  the  honor- 
able member  shall  take  all  the  credit  he  is  entitled  to 
for  his  advocacy  in  times  past  of  the  principles  of  the  na- 
tional democracy,  I  cannot  perceive  how  it  can  justify 
his  present  course.  Others  before  him  have  been  distin- 
guished for  consistent  political  action,  and  yet,  by  a 
single  act,  have  blighted  the  good  effect  of  all  their  ante- 
cedents, and  destroyed  their  political  future.  Without 
intending  anything  personal,  but  by  way  of  illustration, 
I  would  say  that  Arnold  was  esteemed  a  true  and  loyal 
officer,  and  had  done  the  State  some  service,  until  he 
committed  treason  against  his  country.  Will  it  be 
urged  that  his  treason  was  therefore  justified  ? 

I  have  heard  much  during  this  debate  of  "  reading 
members  out  of  the  party."  Sir,  no  formal  pronuncia- 
mevito  is  required  for  that  purpose.  They  are  out  by 
the  operation  of  their  own  act ;  they  are  in  the  position 
of  the  soldier  who,  in  the  hour  of  battle,  deserts  to  the 
enemy  ;  the  penalty  follows.  It  is  idle  to  suppose  that, 
when  gentlemen  proclaim  the  result  of  their  act  will  be 
to  break  down  the  national  party,  and  elevate  a  sectional 
one  with  its  attendant  consequences,  and  are  doing  all 
they  can  to  attain  that  object,  they  can  remain,  when  the 
act  is  completed,  in  full  communion  with  the  party  they 
seek  to  destroy.  Their  proper  place  is  with  the  opposi- 
tion, and  time  will  soon  place  them  in  that  association. 
History  is  full  of  examples  of  conflicts  between  individ- 
uals and  the  party ;  but  each  instance  has  resulted  in  a 
signal  failure  of  the  assailant.  The  contest  in  such  cases 
is  as  unequal  as  that  between  a  mere  guerilla  band  and  a 
powerful  and  well -organized  army.  Men,  as  individuals, 
are  apt  to  exaggerate  their  power  when  directed  against 
organizations.  In  struggles  with  the  democratic  party, 
men  are  but  pigmies  contending  with  giants.  They  may 
be  compared  to  the  fly  on  the  wheel ;  the  fly  is  crushed, 
and  the  wheel  rolls  on.  Whenever  a  great  issue,  as  in 
the  present  case,  arises,  involving  perhaps  the  very  exist- 
ence of  the  Union,  it  is  the  duty  of  every  man  having 
at  heart  the  welfare  of  the  nation  to  sustain  the  Admin- 
istration in  its  patriotic  course,  and  more  especially  those 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     251 

v  ho  hold  their  seats  in  this  honorable  body,  and  were 
e  ected  upon  the  same  platform  with  the  present  distin- 
g  lished  chief. 

Sir,  I  entreat  these  anti-Lecompton  democrats  to  pause 
i  the  step  they  are  about  to  take  in  the  opposition. 
^  ou  concede  the  great  purpose  and  mission  of  the  na- 
t  onal  democratic  party;  you  concede  it  is  the  great 
1  ulwark  that  alone  can  arrest  the  ascendency  of  section- 
filism;  you  concede  that  such  a  triumph  may  result  in  a 
P-  jparation  of  the  States,  bringing  in  its  train  calamities 
1  aat  may  be  conjectured  but  not  foretold ;  and  yet  you 
t-  3and  ready  to  strike  the  parricidal  blow.  Should  this 
i  leasure  be  defeated  by  your  votes,  and  the  disaster  flow 
j  rom  it  which  has  been  predicted,  you  cannot  fail  to  be 
]  egarded  hereafter  as  the  parricides  of  the  Republic. 

The  Northern  national  democracy  stands  now,  and  will 
•  ontinue  to  stand  hereafter,  by  the  principles  established 
>y  the  Kansas-Nebraska  act,  and  those  enunciated  at 
Cincinnati.  We  insist  that  the  Territories,  as  well  as 
i  States,  have  the  sole  right  to  determine  their  local  and 
nunicipal  matters,  and  that  each  should  be  let  alone  to 
nanage  them  in  their  own  way.  This  course  must  ulti- 
nately  force  the  slavery  agitation  out  of  Congress,  not- 
withstanding the  embarrassment  which  has  thus  far 
ittended  the  application  of  the  principle  to  Kansas. 
The  present  difficulty  has  grown  out  of  the  premature 
immigration  forced  upon  the  Territory  by  slavery  agita- 
tors which  went  there  not  to  cultivate  the  soil,  but  to 
foster  the  excitement  which  has  of  late  convulsed  the 
whole  country,  and  of  which  all,  I  believe,  are  heartily 
tired.  This  rule  adopted  will  not  produce  like  conse- 
quences again.  There  may  be  some  struggle  when  a 
constitution  with  slavery  is  presented,  but  I  believe  pub- 
lic sentiment  will  determine  that  it  shall  be  no  bar  to 
admission  on  that  ground.  Once  firmly  established  and 
acted  upon  in  good  faith,  slavery  will  be  left  to  the  law 
of  climate  and  soil  to  control  it.  This  law,  which  has 
been  silently  working  since  the  adoption  of  the  Constitu- 
tion, has  caused  the  abolition  of  slavery  in  six  of  the 
original  States,  and  either  abolished  or  prohibited  it  in 
nine  of  the  new  States  since  admitted,  and  which  has 


u 


252     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

now  brought  to  us  two,  if  not  more,  free  States  for  ad- 
mission into  the  Union,  thereby  destroying  the  equilib- 
rium between  the  slave  and  free  States,  imposes,  in  my 
judgment,  a  higher  duty  upon  the  national  democracy  of 
the  North  than  has  hitherto  existed,  to  see  that  the  com- 
promises of  the  Constitution  are  maintained,  and  the 
rights  of  the  States  secured.  Its  action  in  the  past  is  a 
guaranty  for  the  future.  All  that  the  Southern  States 
demand  is  to  be  allowed  to  control  their  own  affairs,  and 
equal  rights  with  the  other  States.  When  a  new  State 
seeks  admission,  and  its  people  desire  slavery,  Congress 
should  not  interpose  objection,  if  the  constitution  be  re- 

Giblican  in  form,  but  should  at  once  admit  it  into  the 
nion.     The   national  democracy  are   fully  committed 
upon  this  point,  and  will  redeem  the  pledge. 

My  colleague  [Mr.  HASKIN],  in  his  remarks,  uses  the 
following  language : 

"  I  honestly  believe  that,  but  for  patronage,  fast  becoming  the 
bane  of  the  Republic,  not  ten  democratic  members  from  the  free 
States  would  be  found  supporting  the  Lecompton  Constitution  as 
it  has  been  presented  to  us." 

I  hold  that  no  member  of  this  honorable  body  should 
make  even  a  vague  charge  of  this  grave  character  against 
his  associates,  even  from  belief,  unless  founded  upon  some 
fact.  If  the  integrity  and  honor  of  any  gentleman  has 
yielded  to  the  seductions  of  patronage  and  power,  it  is 
proper  and  due  to  the  dignity  of  this  honorable  body  that 
it  should  be  known,  and  the.  person  or  persons  named. 
I  therefore  call  upon  my  colleague  [Mr.  HASKIN]  to  give 
this  information,  and  the  facts  upon  which  his  belief  is 
founded ;  my  respect  for  this  honorable  body  forbids 
that  I  should  characterize  this  charge  in  such  terms  as  it 
deserves.  I  await  his  response  :  I  can  make  great  allow- 
ance for  excitement  incident  to  debate.  The  remarks  of 
my  colleague,  however,  having  been  prepared  in  advance, 
and  read  from  a  printed  copy,  indicate  premeditation  and 
deliberation.  While  my  colleague  makes  an  assault  on 
the  one  side,  the  honorable  member  from  Illinois  [Mr. 
MORRIS],  in  saying  that  the  "  Northern  men  who  vote  for 
the  admission  of  Kansas  under  the  Lecompton  Constitu- 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     253 

ti  »n  are  going  to  their  political  graves  "  (I  do  not  quote 
tl  3  exact  language,  not  having  his  remarks  before  me), 
p  ys  us  ;i  high  compliment,  for  which,  as  one,  I  thank 
Irin.  It  shows  his  conviction  that  we  have  been  guided 
b  •  higher  motives  than  selfish  considerations. 

Sir,  I  have  heard  it  stated1  on  this  floor,  and  held  in 
k  'rorem  over  the  Northern  Lecorapton  members,  that  the 
K  ansas-Nebraska  act  republicanized  the  last  Congress. 
V  rithout  desiring  to  refer  in  detail,  I  desire  to  state  a 
f ,  ct  not  generally  understood.  The  whole  country  has 
b  jen  made  aware  long  since  of  the  division  in  the  demo- 
c  -atic  party  of  the  State  of  New  York  from  1853  to  1856. 
I ;  is  to  be  deplored,  but  nevertheless  is  true,  that  had  the 
I  [ard  and  Soft  vote  been  united  upon  single  candidates 
i  i  1854,  it  would  have  secured  eleven  more  members  in 
t  le  last  Congress — seven  by  a  majority  vote,  and  four  by 
i  plurality — making  a  total  of  fifteen,  and  given  to  the 
(  emocratic  party  in  Congress  a  decided  majority.  I  may 
t  Iso  say  that  the  twelve  democratic  members  from  that 
State  in  the  present  Congress  were  returned  upon  the 
principle  contained  in  the  Kansas-Nebraska  act. 

In  times  gone  by,  the  parties  in  this  country  were 
divided  into  the  democratic  and  whig  parties.  Many 
glorious  battles  were  fought  between  them,  and  many 
brilliant  and  gallant  contests  were  had  by  the  rival  leaders 
upon  this  floor  upon  the  great  questions  which,  from  time 
1o  time,  have  agitated  the  country.  As  participants  in 
Iliese  intellectual  encounters,  the  names  of  Calhoun,  Clay, 
Webster,  Benton,  and  a  host  of  others,  now  occur  to  me. 
]~n  all  the  giant  efforts  of  these  statesmen — amid  all  the 
Jieat,  zeal,  and  bitterness  of  debate  and  party  warfare — 
*:here  was  one  common  bond  between  them,  and  that  was 

••;he  love  of  the  Union.  The  whig  party  was  national— 
.t  was  glorious  to  battle  with  it — it  was  "  a  foe  worthy  of 
)iir  steel."  In  its  triumphs,  however  much  we  might 
1  iifer  from  its  policy,  the  country  rested  secure  upon  its 
nationality.  The  great  issues  between  them  were  decided 
by  the  people  in  favor  of  the  democratic  party,  and  the 
contentions  ceased.  The  great  leaders  of  the  whig  party, 
Clay  and  Webster,  having  lived  the  period  allotted  to 
,  and  devoted  their  whole  lives,  from  their  manhood 


II 


254     NATIONALITY  OF  THE  DEMOCRATIC  PARTY. 

to  their  graves,  to  the  service  of  their  country,  full  of 
honors,  passed  away  to  the  silent  tomb,  amid  grieved 
hearts,  bearing  to  their  eternal  home  the  affection  and 
veneration  of  their  fellow-countrymen.  The  whig  party 
ceased  to  exist,  and  the  opposition  party  were  without  a 
leading  principle.  The  slavery  agitation,  which  had  for 
a  long  time  been  seen  but  dimly  in  the  distance,  now 
culminated  in  the  republican  party,  and  a  bitter,  sec- 
tional, and  fanatical  contest  ensued.  In  this  struggle  the 
national  democratic  party — lifting  itself  up  to  its  giant 
proportions,  reinforced  by  a  part  of  the  national  portion 
of  the  whig  party,  several  of  whom,  I  am  proud  to  say, 
are  now  upon  this  floor  cooperating  with  us,  met  the 
enemy  and  triumphed.  Though  defeated,  they  were  not 
conquered ;  and  the  war  is  yet  waged. 

No  intelligent  person  can  be  so  blind  as  not  to  see,  in 
the  success  of  a  Northern  sectional  party  arrayed  against 
the  constitutional  rights  of  the  South,  that  a  counter-geo- 
graphical party  must  arise.  When  this  occurs,  is  is  easy 
to  foretell  the  consequences.  I  shall  not  dwell  upon  it. 
In  this  crisis  we  can  only  look  to  the  democratic  party  in 
the  future ;  it  occupies  a  broad,  national  platform,  and 
guards  scrupulously  the  rights  of  all  sections.  I  believe 
in  its  invincibility  and  in  its  great  destiny ;  its  national- 
ity will  preserve  it ;  the  people  must  see  the  consequen- 
ces of  its  defeat ;  and  I  feel  a  deep  conviction  that  when 
the  hour  of  trial  comes,  all  classes  will  rally  to  its  sup- 
port as  the  only  means  of  preserving  the  Union,  which 
they  are  taught  to  love  and  cherish  from  early  childhood. 
I  love  my  whole  country ; '  it  is  with  regret  that  I  see 
contrasts  presented,  attempting  to  show  the  greater  pros- 
perity of  one  section  or  class  over  another.  We  are  one 
aggregated  whole — what  adds  to  one  part  strengthens 
the  other.  Our  power  and  greatness  as  a  nation  result 
from  combination,  and  from  that  alone  must  it  increase 
and  be  carried  on  in  the  fulfilment  of  its  great  future. 

This  protracted  struggle  is  drawing  to  a  close;  the 
President  of  the  United  States  has  taken  his  position 
firmly,  and  it  is  our  grave  and  solemn  duty  to  sustain 
him.  I  have  taken  mine,  whatever  may  be  the  individual 
consequence,  and  can  say,  in  the  language  of  the  lament- 


NATIONALITY  OF  THE  DEMOCRATIC  PARTY.     255 

(1  President  Jackson,  when  standing  over  the  rocks  of 
;  he  Rip  Raps,  looking  upon  the  ocean,  when  friends  were 
leserting  him  by  legions  in  consequence  of  his  firm  course 
ipon  the  public  measures  of  his  day  :  "  Providence  may 
hange  my  determination ;  but  man  can  no  more  do  it 
<han  he  can  remove  these  Rip  Raps,  which  have  resisted 
he  rolling  ocean  from  the  beginning  of  time." 


THE  TRUE  POLICY  OF  THE  GOVERNMENT  AS 
TO  THE  CONDUCT  OF  THE  WAR 

WITH  A 

VIEW  TO  THE  PKESERVATION  OF  THE  UNIOK 


HOUSE  OF  REPRESENTATIVES,  January  9,  1865. 


The  House  having  under  consideration  a  motion  to  reconsider 
a  vote  by  which  it  had  rejected  a  joint  resolution  submitting  to 
the  State  Legislatures  a  proposition  to  alter  the  Constitution  by 
an  amendment  abolishing  slavery,  Mr.  Ward  opposed  the  pro- 
posal. He  held,  in  the  following  speech,  that  if  the  right  to  in- 

.  ]  .  ..-!.. 

corporate  the  amendment  existed,  it  was  injudicious  to  exercise 
it  at  the  moment  when  we  should  desire  to  bring  back  the  seceded 
States  to  loyalty  and  obedience.  At  the  same  time  he  opposed 
the  practical  re-admission  into  the  Union,  with  the  right  of  hold- 
ing slaves  as  property,  of  any  State  where  slavery  had  been  swept 
away  by  the  onward  march  of  our  armies. 

MR.  SPEAKER  :  It  is  not  my  intention  to  discuss  at  this 
time  and  place  the  causes  which  have  inaugurated  tlie 
terrible  rebellion  which  has  already  cost  the  Republic 
such  a  frightful  waste  of  life-  and  treasure.  It  is  enough 
for  me  to  know  that  a  death-blow  has  been  aimed  at  the 
heart  of  the  American  Union,  to  feel  indignant  at  the 
outrage  and  solicitous  to  avert  it.  It  is  enough  for  me 
to  know  that  a  sacrilegious  attempt  has  been  made  to 
break  up  the  wisest  form  of  government  that  human 
wisdom  ever  devised,  to  feel  it  my  duty  to  join  in  the 
effort  to  chastise  the  perpetrators  of  so  great  a  crime.  I 
have  not  approved  of  all  that  has  been  done  under  the 
sanction  of  the  war  power.  I  have  deemed  it  proper  to 
protest,  in  the  name  of  the  loyal  and  law-abiding  con- 
stituency I  have  the  honor  to  represent  on  this  floor, 


THE   PRESERVATION   OF   THE   UNION.  257 

against  certain  acts  of  the  Executive  and  Congress,  which, 
in  my  opinion,  have  been  the  means  of  prolonging  this 
sanguinary  war ;  but  I  am  settled  in  the  conviction  that 
secession  is  treason,  and  that  as  such  it  must  be  put  down 
at  all  hazards  and  at  any  cost.  If  secession  succeed, 
republican  liberties  are  lost  forever,  and  the  Government, 
failing  to  vindicate  its  power,  would  forfeit  the  consider- 
ation and  respect  of  every  civilized  nation  on  earth.  If 
the  heresy  of  secession  were  to  be  recognized  as  a  canon 
of  our  political  faith,  there  would  be  an  end  to  our  Gov- 
ernment. Let  Louisiana  secede  unhindered,  and  then, 
when  that  act  has  been  accomplished,  what  is  to  prevent 
her  from  handing  that  State  over  to  England,  or  any 
other  Power,  commanding  as  she  does  the  mouth  of  the 
great  Mississippi  ?  This  she  most  assuredly  has  a  right 
to  do  if  she  has  a  right  to  secede,  thus  closing  up  the 
"  Father  of  Waters,"  and  excluding  all  the  States  on  its 
borders  from  a  market.  The  same  principles  would  apply 
to  other  States.  Hence  the  duty  of  every  American 
patriot,  whatever  his  station  or  condition,  to  uphold  the 
Government  in  its  efforts  to  compel  the  seceded  States  to 
respect  the  Constitution  and  the  laws  of  the  country. 
Upon  this  conviction  of  duty  I  have  ever  acted  since  the 
first  insult  to  our  flag  was  offered.  The  same  abiding 
sense  of  the  responsibility  which  rests  upon  me  as  a  Rep- 
resentative of  the  people  in  Congress  will,  I  trust,  carry 
me  unflinchingly  through  whatever  phase  may  yet  remain 
undeveloped  in  the  fearful  drama  which  has  been  so  long 
in  process  of  action.  If  the  conduct  of  the  war  had  not 
been  marked  by  some  of  the  most  startling  usurpations 
of  power  that  ever  made  a  free  people  tremble  for  their 
liberties,  my  voice  should  never  have  been  raised  except 
in  the  way  of  encouragement  and  sympathy. 

Much  wonder  has  frequently  been  expressed  that  in  this 
fearful  crisis  through  which  our  bleeding  country  is  now 
passing,  in  the  awful  presence  of  the  grand  and  sublime 
uprising  of  the  people  of  this  nation,  no  master  spirit  has 
yet  risen  in  the  midst  of  our  assemblage  capable  to  stay 
the  uplifted  hand,  and  gifted  with  that  peculiar  sagacity 
which  employs  the  acquired  light  of  yesterday  in  the  se- 
lection of  a  path  for  to-morrow.  Whatever  may  be  the 
17 


258  THE    PRESERVATION    OF   THE   UNION. 

cause,  it  cannot  be  denied  that  the  present  crisis  has  most 
signally  failed  in  the  production  of  those  towering  intel- 
lectualities whose  impress  never  fails  to  mark  itself  deeply 
upon  the  mould  of  time*,  and  which  during  all  our  former 
trials  as  a  nation  have  been  wont  to  direct  the  destinies 
of  the  Republic  triumphantly  through  the  fiery  paths  of 
sedition  and  conspiracy.  Hence  the  blunders  and  mis- 
managements which  have  characterized  the  conduct  of 
this  war.  The  spirit  which  was  wont  to  kindle  the  voices 
of  former  statesmen  as  if  with  a  coal  from  the  altar  is  no 
longer  manifest  in  the  places  of  power.  Under  these  cir- 
cumstances, and  in  view  of  the  obstacles  which  we  may 
yet  have  to  contend  with  before  the  blessings  of  peace 
can  be  restored  to  our  distracted  country,  it  behooves 
every  man  in  the  position  I  have  the  honor  to  occupy, 
however  humble  his  pretensions  or  capacity,  fearlessly  to 
present  his  views  on  the  great  questions  now  at  issue,  in 
order  that  out  of  the  very  multitude  of  counsels  some 
good  and  practical  result  may  be  attained. 

I  have  observed  that  the  more  entirely  the  objects  which 
stand  in  the  way  of  the  execution  of  any  purpose  are  ig- 
nored, the  more  easy  it  becomes  to  lay  down  plans  for  the 
perfect  management  of  the  affairs  of  the  country,  military 
and  financial.  Overlook  the  rivers  and  the  mountains, 
the  distance  and  the  atmospheric  phenomena,  the  reluct- 
ance upon  one  side,  and  the  resistance  upon  the  other,  and 
to  construct  the  most  infallible  programme  for  the  sup- 
pression •  of  the  rebellion  is  one  of  the  easiesjb  of  un- 
dertakings. To  overlook  the  laws  of  trade,  the  limits  of 
the  popular  power,  and  the'  propensity  of  mankind  to 
prefer  their  own  to  any  other  interest,  and  to  prescribe  a 
financial  policy  which  shall  carry  the  country  safely 
through  the  war  and  its  consequences  is  a  work  not  above 
the  powers  of  the  most  ordinary  capacity.  Individuals 
entirely  able  at  a  single  effort  or  less  to  solve  all  the 
problems  of  our  condition  are  easily  to  be  found.  The 
country  is  rather  redundant  of  them  than  otherwise.  They 
cross  us  on  all  sides,  in  the  newspapers  and  on  the  street 
corners.  But  that  which  alike  marks  all  their  solutions 
is  the  omission  of  more  or  less  and  sometimes  of  all  the 
real  elements  of  the  calculation.  "  On  to  Richmond  "  is 


THE   PRESERVATION   OF   THE   UNION.  259 

easily  said.  "Order  a  levy  en  masse,  and  advance  all  along 
the  line  "  is  a  suggestion  so  magnificent  as  to  give  an  air 
of  pusillanimity  to  the  inquiry  whether  its  execution  is 
practicable.  Issue  legal-tender  notes  ad  libitum,  tax 
without  measure,  and  borrow  without  limit,  are  pieces  of 
advice  which  are  all  the  more  acceptable,  perhaps,  because 
they  who  propose  them  refrain  from  disclosing  that  there 
are  points  beyond  which  neither  of  these  sources  of  reve- 
nue can  be  made  available.  For  my  own  part,  sir,  I  shall 
not  take  upon  myself  the  invidious  task  of  attempting  to 
solve  the  perplexing  problem  of  the  war,  nor  yet  of  sug- 
gesting any  panacea  for  the  cure  of  existing  evils.  I 
simply  desire  to  offer  a  few  remarks  which  are  forced 
upon  me  by  the  constantly-recurring  deviations  from  the 
avowed  object  for  which  this  devastating  war  was  origi- 
nally and  authoritatively  declared  to  be  waged.  I  feel 
that  I  am  somewhat  entitled  to  the  indulgence  of  the 
House  when  I  venture  to  raise  my  voice  as  a  warning  to 
those  in  power  that  the  mass  of  the  people  no  longer  re- 
cognize them  as  their  representatives  in  a  glorious  struggle ; 
that  they  no  longer  consider  the  war  as  a  war  for  the  sal- 
vation of  the  country,  but  as  having  degenerated  to  a 
strife  about  a  collateral  issue  utterly  foreign  to  the  cause 
which  they  entered  so  heartily  to  sustain. 

Sir,  when  the  rebellion  first  broke  out  I  had  the  honor 
of  being  a  member-elect  of  this  body,  and  from  the  day 
that  I  took  my  seat  on  this  floor  I  have  never  sought  to 
(Miibarrass  the  Government  in  its  efforts  to  bring  back  the 
seceded  States  under  the  glorious  flag  of  that  Union  which 
had  protected  them  all  so  long  and  so  well. 

In  the  extra  session  of  1861,  the  House  of  Representa- 
tives declared  by  a  solemn  act  "  that  the  war  was  not 
•«1  upon  our  part  in  any  spirit  of  oppression,  nor  for 
any  purpose  of  conquest  or  subjugation,  nor  for  the  pur- 
pose of  overthrowing  or  interfering  with  the  established 
institutions  of  those  States,  but  to  defend  and  maintain 
the  supremacy  of  the  Constitution,  and  to  preserve  the 
Union  with  all  the  dignity,  equality,  and  rights  of  the 
several  States  unimpaired."  Had  the  noble  and  patriotic 
sentiments  enunciated  in  that  resolution  been  made  the 
rule  of  action  by  both  branches  of  the  Government,  the 


260  THE   PRESERVATION   OF   THE   UNION. 

war  would,  I  believe,  before  this  time  have  been  termi- 
nated ;  for  whatever  may  be  said  of  the  proud  and  in- 
domitable spirit  with  which  the  people  of  the  South  have 
carried  on  the  war,  and  of  their  attitude  of  haughty  de- 
fiance, I  am  fully  convinced  that  if  the  olive  branch  had 
been  tendered  in  that  spirit  of  magnanimity  which  becomes 
a  dignified  Government  after  it  has  vindicated  its  power, 
the  repentant  rebels,  at  least  the  greatest  portion  of  them, 
seeing  the  folly  of  their  ways,  would  long  ere  this  have 
returned  to  their  allegiance. 

This  Government  did  not  begin  the  war.  The  seceded 
States,  at  the  time  the  rebellion  was  inaugurated,  had 
nothing  to  complain  of ;  no  overt  act  had  been  committed 
by  the  Government ;  there  had  been  no  interference  with 
any  of  their  prerogatives ;  none  of  their  citizens  had 
been  burdened  by  taxation ;  all  their  rights  and  institu- 
tions were  under  the  protection  of  the  United  States. 
They  have  gone  out  from  among  us  under  the  false  pre- 
tense that  they  foresaw  in  the  future  that  they  should 
lose  their  just  political  power  and  influence  in  the  Union, 
and  acting  upon  this  self-imposed  delusion,  they  had 
drawn  the  sword  wantonly  and  wilfully  upon  the  Govern- 
ment and  loyal  people  of  the  United  States. 

What  I  mean  by  the  term  olive-branch,  sir,  is  the  exhi- 
bition of  a  generous  and  conciliatory  spirit,  which  I  re- 
gret to  say  has  not  hitherto  characterized  our  invitations 
to  the  people  of  the  seceded  States  to  come  back  and  be 
restored  to  the  inestimable  privileges  of  American  citizens. 
All  our  legislation  on  the  subject,  whether  we  look  to 
the  Confiscation  Bill,  or  to  those  other  severe  enactments 
which  have  called  forth  so  much  bitter  acrimony  on  this 
floor,  has  been  marked  by  a  spirit  of  vindictiveness  and 
oppression  utterly  unworthy  of  a  great  and  a  Christian 
nation.  Even  the  proclamation  of  amnesty  by  President 
Lincoln  fails  to  hold  out  any  hope  of  satisfactory  re- 
sults, because  its  provisions  are  not  in  accordance  with 
the  fundamental  principle  of  self-government,  that  the 
majority  must  rule. 

There  is  in  this  plan  for  restoration  so  triumphantly 
heralded  by  the  friends  of  the  Administration  an  attempt 
at  usurpation  so  offensive  to  the  people  that  no  mind 


THE   PRESERVATION   OF   THE   UNION.  261 

regulated  by  the  usual  dictates  of  sanity,  and  guided  by 
the  wisdom  of  the  Constitution,  could  ever  have  elabor- 
ated. The  proposition  made  by  the  sole  authority  of  the 
President  to  constitute  one-tenth  of  the  citizens  of  a 
State  the  whole  State  is  so  preposterous  that  it  can 
scarcely  be  regarded  as  serious.  Were  such  a  proposition 
to  be  acted  upon,  the  Government  would  find  itself  placed 
even  in  a  more  awkward  position  than  it  occupies  now, 
for  it  would  have  to  maintain  a  standing  army  in  each  of 
the  States  thus  surreptitiously  brought  into  the  Union,  in 
order  to  protect  the  dominant  minority  from  violent  acts 
on  the  part  of  that  overwhelming  majority  which,  by 
this  anomaly  in  legislation,  would  be  totally  disfran- 
chised. 

Sir,  I  am  as  strongly  opposed  as  any  of  my  compeers 
on  the  other  side  of  the  House  to  the  re-admission  into 
the  Union,  with  the  right  of  slave  property,  of  any 
State  where  slavery  has  been  swept  away  by  the  onward 
march  of  our  armies.  Whatever  may  be  the  object  of 
the  war,  the  practical  result  is  the  same ;  and  that  is,  the 
overthrow  of  slavery  in  all  those  portions  of  slavehold- 
ing  territory  which  our  armies  subjugate;  in  these  the 
relation  of  master  and  slave  ceases  to  exist.  The  masters 
retreat  as  our  forces  advance,  and  carry  with  them  a 
portion  of  their  slaves,  but  the  greater  part  remain  be- 
hind and  take  refuge  within  our  lines;  and  the  ques- 
tion is,  what  shall  become  of  them,  and  what  are  our 
duties  in  regard  to  them  ?  The  American  people  have 
behaved  admirably  since  this  war  broke  out.  They 
have  shown  an  energy  and  elasticity  of  spirit,  a  power 
of  organization  and  combination,  a  readiness  to  make 
sacrifices,  a  patriotic  devotion  worthy  of  the  highest 
praise.  Let  us  not  forget  the  claims  of  those  unhappy 
freed  men  whom  we  have  deprived  of  their  masters — their 
natural  guardians  and  protectors. 

The  war  is  no  longer  waged  for  the  purpose  of  restor- 
ing the  Union  of  all  the  sovereign  States  that  are  and 
evrer  were  in  our  great  national  communion,  with  all  the 
purity  and  strength  of  our  precious  Constitution  undim- 
med  and  untarnished,  but  for  the  newly-avowed  object 
of  subjugation,  extermination,  and  emancipation,  until 


262  THE   PRESERVATION   OF   THE   UNION. 

every  Southron  shall  be  reduced  to  the  most  crouching 
arid  abject  submission — not  to  the  Constitution,  but  per- 
sonally to  those  who  hold  the  sword  and  the  purse  of 
the  country.  Sir,  I  am  not  prepared  to  join  in  any  such 
crusade.  I  occupy  the  same  platform  to-day  that  I  did 
on  the  breaking  out  of  the  rebellion.  I  am  in  favor  of 
a  vigorous  prosecution  of  the  war,  by  all  constitutional 
means,  for  the  purpose  of  destroying  the  military  power 
of  the  rebellion ;  but  I  am  not  willing  to  prolong  this 
war  a  moment  longer  than  is  necessary  to  effect  its  legi- 
timate object.  The  consequences  of  a  mistaken  policy 
are  too  serious  to  suffer  me  to  be  governed  by  the  spirit 
of  faction  on  the  one  hand,  or  influenced  by  subserviency 
to  power  on  the  other.  We  have  now  arrived  at  that 
stage  in  the  progress  of  the  war  when  we  should  consid- 
er the  question  of  offering  to  the  people  of  the  rebel 
States  such  conciliatory  terms  as  are  constitutional,  just, 
and  practicable,  and  most  likely  to  lead  to  the  re-estab- 
lishment of  the  national  authority  over  the  whole  coun- 
try. The  terms  and  conditions  offered  to  the  insurgents 
in  the  President's  proclamation  of  amnesty  are  only  cal- 
culated to  inflame  their  hatred  of  the  North  and  impel 
them  to  renewed  resistance.  They  are  flagran  tly  at  vari- 
ance with  the  declarations  voluntarily  made  to  the  people 
of  the  loyal  States  and  published  to  the  world.  I  desire 
to  see  such  terms  offered  as  a  proud  and  already  chast- 
ened people  can  accept  without  positive  degradation  to 
themselves — terms  which  shall  recognize  the  existence 
of  the  States  with  constitutions  and  forms  of  adminis- 
trations— terms,  in  short,  calculated  to  divide  our  ene- 
mies and  draw  the  hearts  of  the  repentant  people  of  the 
decaying  confederacy  toward  our  Government.  When 
these  honorable  terms  are  rejected,  then  I  shall  be  willing 
to  leave  events  to  the  harsh  and  cruel  necessities  of  the 
justice  which  is  vindicated  by  the  sword. 

But,  sir,  although  the  beneficent  spirit  which  pervaded 
Mr.  Crittenden's  resolution,  to  which  I  have  referred,  was 
not  allowed  to  exercise  its  healthy  influence  over  the  de- 
liberations of  this  body,  its  provisions  were  tacitly  adopted 
as  a  governing  principle  in  the  conduct  of  the  war — so 
much  so,  that  when  Generals  Fremont,  Hunter,  and 


THE   PHESEKVATION   OF   THE    UNION.  263 

Phelps,  issued  their  proclamations  of  emancipation,  the 
President  revoked  them  all,  declaring  again  and  again 
that  he  had  no  right  under  the  Constitution  to  emanci- 
pate the  slaves.  Those  who  spoke  in  behalf  of  the  Ex- 
ecutive, and  in  elucidation  of  his  views,  stated  every- 
where— in  the  public  streets,  in  conventions,  and  in  the 
Legislatures — that  the  President  was  determined  that 
the  seceded  States  on  re-entering  the  Union  should  be 
protected  in  all  their  rights.  Governor  Stanley,  who 
travelled  five  thousand  miles,  it  is  supposed  at  the  ex- 
press request  of  the  President,  that  he  might  try  to  per- 
suade the  people  of  North  Carolina  out  of  the  rebellion, 
stated  in  his  speech  of  June  17,  1862,  delivered  at  Wash- 
ington, North  Carolina,  that  Mr.  Lincoln  was  no  aboli- 
tionist, that  he  was  the  best  friend  the  South  had,  and 
that  all  the  Administration  wanted  was  peace.  Gover- 
nor Stanley  spoke  according  to  instructions,  as  many 
others  had  done  before  him  in  every  section  of  the  coun- 
try, which  had  the  effect  of  producing  a  strong  feeling 
of  reaction  throughout  the  border  States,  and  adding 
thousands  upon  thousands  to  the  recruiting  lists. 

These  assurances,  Mr.  Speaker,  concerning  the  alleged 
objects  of  the  war  were  of  so  broad  and  distinct  a  char- 
acter that  no  man  of  well  regulated  mind  could  avoid 
confiding  in  them.  For  my  own  part,  I  relied  as  impli- 
citly upon  these  solemn  pledges,  as  the  magistrates  of 
ancient  Rome  did  on  the  sybiline  books  when  danger 
pressed  the  eternal  city.  I  should  frankly  have  despised 
myself  had  I  suffered  a  doubt  to  rise  in  my  own  mind  as 
to  the  integrity  of  purpose  which  governed  the  action  of 
the  President.  All  that  I  paused  to  consider  was,  that 
when  he  took  his  oath  of  office  he  swore  to  maintain  the 
Union  and  enforce  the  laws ;  that  had  he  attempted  to 
trifle  with  the  sacred  rights  of  the  people,  and  allow  a 
Government  to  be  broken  up  which  he  had  sworn  to 
preserve,  he  would  have  acted  contrary  to  the  require- 
ments of  the  Constitution,  and  deserved  to  be  impeached. 
Upon  these  solemn  convictions,  I  rallied  all  my  feeble 
strength  to  the  support  of  the  Government,  the  Constitu- 
tion, and  the  Union,  looking  upon  secession  as  eternal 
war,  and  recognizing  this  great  principle — that  we  are 


264  THE   PRESERVATION   OF   THE   UNION. 

one  people,  that  one  we  will  remain,  and  one  we  will 
die. 

I  am  well  aware,  sir,  that  my  course  in  sustaining  the 
war  policy  of  the  President  has  subjected  me  to  consid- 
erable animadversion,  and  that  my  motives  of  action 
have  frequently,  and  sometimes  wickedly,  been  miscon- 
strued by  those  who  either  could  not  understand  the 
emergencies  of  the  occasion,  or  who  preferred  seeing 
this  great  Republic  split  up  into  fragments  rather  than 
yield  one  iota  of  their  prejudices.  But,  sir,  there  is 
one  tribunal  to  which  I  appeal  with  feelings  of  pride 
and  confidence  from  the  judgment  of  disunionists  :  it  is 
the  tribunal  of  my  conscience.  The  verdict  which  I  find 
recorded  there  will  sustain  me  under  all  calumnies  and 
vituperations.  When  the  day  shall  come  for  me  to  ren- 
der an  account  of  my  stewardship  to  my  constituents,  I 
shall  be  able  to  show  them  that  in  denouncing  treason 
and  in  sustaining  the  Government  in  its  efforts  to  put 
down  rebels  in  arms  I  have  been  true  to  myself,  to  my 
country,  and  to  the  sternest  requirements  of  the  demo- 
cratic creed.  How  much  the  democratic  party,  acting 
as  a  party,  through  its  organization,  may  do  to  bring 
back  peace  to  the  country,  it  is  impossible  to  predict. 
That  will  depend  upon  the  steadiness  with  which  it  adheres 
to  what  are  admitted  to  be  democratic  principles.  To 
expect  to  return  to  sound  practices  in  the  Government, 
through  the  medium  of  a  party  which,  from  any  sugges- 
tions of  expediency,  however  plausible,  departs  from  its 
Srinciples,  is,  of  all  expectations,  the  most  irrational, 
eace  will  return ;  the  war'  fury  is  a  passion  which 
exhausts  itself.  But,  however  desirable  peace  may  be, 
we  ought  to  be  united  in  the  determination  that  when 
it  comes  it  should  bring  with  it  the  Union  of  the  States 
under  the  Federal  Constitution.  Those  who  fail  to 
recognize  this  national  exigency  are  not  imbued  with  the 
true  spirit  of  democracy ;  they  have  read  the  signs  of 
the  times  to  very  little  purpose.  The  democratic  party 
is  essentially  a  party  of  progress,  and  those  who  aspire 
to  be  its  leaders  ought,  at  least,  to  have  sense  enough  to 
know  that  we  are  in  the  midst  of  a  great  revolution,  and 
that  revolution  is  progress. 


THE   PRESERVATION   OF   THE   UNION.  265 

The  only  issue  before  the  people  at  this  time  is  the  is- 
h  ue  of  union  or  disintegration.     I  admit  that  the  country 
i  leeds  peace,  and  I  am  anxious  to  secure  it ;  but  I  do  not 
vant  to  get  it  by  indirection.     In  my  judgment,  the  only 
easible  plan  of  restoration  is  a  vigorous  prosecution  of 
he  war,  or  the  proffer  of  conciliatory  terms  to  those  who 
ire  willing  to  renew  their  allegiance  to  the  Federal  Gov- 
irnment.     These  are  the  only  paths  which  lead  to  peace, 
ind  I  wish  the  people  to  understand  the  stern  reality  of 
:he  fact.     It  is  a  great  mistake,  sir,  to  suppose  that  po- 
litical truth  and  naked  fact  are  meat  too  strong  for  their 
digestion,  and  that  the  reality  must  be  largely  diluted 
with  romance  in  order  to  render  it  palatable  to  them.     I 
sincerely  believe  that  the  best  way  to  deal  with  the  peo- 
ple, in  order  to  secure  their  support  to  a  just  cause,  is  to 
place  before  them  the  true  issue  in  the  most  distinct  man- 
ner.    I  believe,  furthermore,  that  good  causes  have  failed 
more  frequently  through  the  cowardice  and  double-deal- 
ing of  professed  politicians,  under  the  presumption  that 
the  people  could  only  be  made  to  do  right  by  deceiving 
them  and  playing  upon  their  prejudices,  than  from  all 
other  causes  combined.      In  the  hurry  and  spirit  of  the 
hour  men  are  a  little  too  apt  to  think  doubt  and  consid- 
eration evidences  of  disloyalty,  and  caution  and  patience 
vices  rather  than    virtues.      This  error  has  been   made 
several  times  since  the  war  began,  and  has  resulted  in 
depression  among  the  people,  when  the  truth  dispelled 
the  brilliant  anticipations  of  enthusiastic  hopes. 

It  would  seem,  to  a  superficial  observer,  that  rapid  ad- 
vances are  being  made  in  the  overthrow  of  popular  lib- 
erty, that  the  people  are  supine  and  indifferent  on  the 
subject,  that  one  essential  requisite  after  another  of  a 
popular  government  is  being  swept  away  into  the  mad 
vortex  of  fanaticism  and  passion,  until  hardly  the  form 
of  our  grand  old  fabric  of  constitutional  liberty  remains 
as  a  mournful  memento  of  the  glorious  past.  To  those, 
however,  who  more  critically  analyze  public  events,  it  will 
be  seen  that  all  grave  questions  outside  of  the  restoration 
of  the  Union  have  been  merely  postponed  until  the  ter- 
mination of  the  war.  The  people  have  been  taught  to 
revere  the  Constitution  and  the  Union.  The  conviction 


263  THE   PRESERVATION   OF   THE   UNION. 

of  their  judgment  is  that  the  structure  of  our  Govern- 
ment is  well  adapted  to  develop  the  commercial,  agricul- 
tural, and  industrial  resources  of  the  country,  ar,d  to  pro- 
mote the  general  prosperity  and  happiness.  The  Consti- 
tution in  its  operation  prior  to  the  rebellion  contained 
every  safeguard  requisite  for  a  prosperous  career.  The 
history  of  every  nation  demonstrates  that  its  citizens  will 
accept  the  form  of  government  best  calculated  to  give 
protection  to  person  and  property  and  to  promote  the 
general  welfare.  Trade,  commerce,  agriculture,  and  all 
the  industrial  pursuits,  thrive  under  a  stable  government 
and  languish  and  perish  under  the  opposite  one.  Under 
the  Constitution  the  equilibrium  is  well  preserved.  The 
passage  of  a  law  requires  the  co-operation  of  this  honor- 
able body,  the  Senate,  and  the  Executive.  If  we  pass 
an  unconstitutional  measure,  the  Senate  operates  as  a 
check ;  if  both  bodies  pass  such  an  act,  the  President 
can  veto  it ;  if  all  co-operate,  the  Supreme  Court  can  in- 
terpose its  decision  and  declare  the  act  void.  I  know  of 
no  nation  in  which  the  rights  of  the  people  are  more 
carefully  and  admirably  guarded.  In  addition,  this  is 
the  only  country  in  modern  times  that  has  thus  far  suc- 
cessfully demonstrated  the  capacity  of  the  people  for  self- 
government.  This  problem  is  now  on  trial.  For  these 
reasons,  when  the  rebellion  began,  the  people,  with  great 
unanimity,  rallied  to  the  support  of  the  Government 
without  respect  to  party ;  such  unanimity  continued  un- 
til the  prosecution  of  the  war  was  diverted  from  the 
original  object,  the  restoration  of  the  Union,  and  a  series 
of  measures  were  inaugurated,  such  as  confiscation,  abo- 
lition, emancipation,  suspension  of  the  writ  of  habeas 
corpus  in  the  loyal  States,  and  others  of  a  like  charac- 
ter, which  divided  the  North  and  united  the  South ; 
abolitionism  abolished  slavery  in  the  District  of  Colum- 
bia ;  confiscation  merely  enabled  property  to  be  con- 
fiscated in  such  parts  of  the  country  as  have  been  re- 
covered from  the  rebels  ;  the  emancipation  proclamation 
has  done  nothing  more,  as  yet,  than  the  legitimate  opera- 
tion of  the  war  power  would  have  achieved,  that  is,  lib- 
erated slaves  where  the  army  has  secured  possession.  It 
is  evident,  in  my  judgment,  that  the  whole  policy  of  the 


F     " 

••• 

UNI  V  F.RSITY 


V  j 
THE   PRESERVATION   OF   THE   UNION.  267 

^^  ernment  has  been,  since  the  adoption  of  the  Critten- 
(  en  resolution  by  this  honorable  body,  to  postpone  in- 
<  efinitely  the  close  of  the  war.  Entertaining  these  views, 
]  deemed  it  my  duty  to  oppose  all  these  collateral  issues, 
*-  ich  as  arbitrary  arrests,  confiscation,  suspension  of  the 
A  rrit  of  habeas  corpnx,  and  the  free: loin  of  the  press  in 
loyal  States,  and  emancipation^  as  having  a  tendency  to 
i  etard  a  successful  issue  to  this  most  deplorable  war. 

Many  honorable  members  of  this  House  for  whom  I 

]  ave  great  respect,  supposed  that  these  measures,  great 

;a  themselves,  and  especially  that  of  arbitrary  arrests, 

rere  paramount  in  the  public  mind,  and  would  over- 

r  hadow  all  other  questions.    I  concede  the  gravity  of  the 

>oint  involved,  but  still,  great  as  that   and   the  other 

•  ollateral  issues  are,  the  people  regarded  the  life  of  the 

lation  and  the  problem  of  self-government  as  paramount, 

ind  desired  these  issues  first  settled  before  permitting 

>thers  to  engross  their  attention.      The  Union  restored 

>r  separation   accomplished,  these  gjrave  questions  will 

.hen  become  subjects  of  serious  inquiry,  and  the  culpable 

Kir  ties  be  held  responsible  for  the  inroads  made  upon 

personal  rights  and  liberty. 

In  addition  to  the  series  of  measures  to  which  I  have 
referred,  we  are  now  called  upon  to  sanction  a  joint 
resolution  to  amend  the  Constitution  so  that  all  persons 
shall  be  equal  under  the  law,  without  regard  to  color, 
and  so  that  no  person  shall  hereafter  be  held  in  bondage. 
I  might  object  to  this  amendment,  sir,  upon  the  ground 
that  to  prohibit  the  establishment  or  continuance  of 
slavery  as  a  legal  relation  would  be  virtually  to  admit 
that  it  may  exist  as  such  legal  relation,  and  that  such  an 
admission  in  the  Constitution  would  leave  that  instru- 
ment, in  respect  to  human  liberty,  in  a  worse  state  than 
it  is  at  present.  Upon  this  point,  however,  I  do  not 
intend  to  enlarge;  for,  as  I  understand  it,  the  fact  of 
servitude  among  a  people  will  be  little  affected  by  any 
provision  which  their  constitution  may  or  may  not 
embody. 

Sir,  it  would  seem  to  me  that  the  sum  total  of  the 
wisdom  of  the  ruling  party  is  contained  in  the  dogma 
that  the  negro  is  exactly  like  the  white  man.  To  some 


2C8  THE   PRESERVATION   OF   THE   UNION. 

it  may  seem  that  this  is  not  very  much,  hardly  enough  to 
constitute  the  foundation  of  a  political  system  and  an 
administrative  policy  for  a  great  nation  and  a  numerous 
people ;  but  this  is  a  matter  of  opinion.  Some  may 
suppose  that  the  basis  of  a  political  system  ought- 
observing  the  uses  of  sciences  in  general — to  be  laid  upon 
some  fact,  the  existence  of  which  is  capable  of  demonstra- 
tion; but,  sir,  we,  the  people  of  the  United  States,  are 
trying  great  and  sublime  experiments  in  politics,  and  if 
we  can  succeed  in  making  something  stand  upon  nothing, 
will  it  not  show  that  we  are  justly  entitled  to  the  reputa- 
tion for  political  sagacity  and  adroitness  which  we  have 
been  considerably  more  ready  to  claim  than  the  benighted 
statesmen  of  Europe  have  been  willing  to  accord  ?  So 
far  as  I  can  see,  Mr.  Speaker,  in  any  form  of  civilization 
resembling  our  own,  servitude  will  always  exist;  and 
servitude  rendered  necessary  by  circumstances  which  the 
servile  party  cannot  control,  is  bondage.  Bondage  will 
differ  in  form,  as  it  is  modified  by  the  character  of  the 
parties  between  whom  it  exists,  and  it  will  differ  in  in- 
tensity as  it  is  affected  more  or  less  by  external  conditions. 
The  relation  of  master  and  servant  in  the  South  is  natural 
to  this  extent :  it  is  the  relation  into  which  the  white  and 
black  races,  being  brought  together,  naturally  fell  under 
the  influences  of  mutual  necessities  for  personal  security, 
social  tranquillity,  and  subsistence.  The  relation  of 
master  and  servant  in  Great  Britain  is  affected  by  the 
pressure  of  a  costly  Government,  which  draws  from  labor, 
through  capital,  the  means  to  defray  its  annual  expenses. 
Servitudes  differ  in  degree  and  they  differ  in  kind,  but 
the  most  important  difference  of  the  two — the  one  that 
is  at  once  the  most  significant  and  the  least  changeable— 
is  the  difference  in  degree ;  a  man  may  be  nominally  free, 
but  if  he  is  a  workman  without  capital,  and  lives  in  a 
state  of  society  of  which  it  may  be  said  "once  a  peasant, 
always  a  peasant ;  once  a  factory  operative,  always  a 
factory  operative;"  if  the  constant  labor  of  his  body 
when  in  health  is  only  just  sufficient  to  provide  him  with 
food  and  clothing,  and  if  old  age,  or  a  few  days  of  illness, 
inevitably  reduce  him  to  pauperism  or  starvation,  he  has 
little  to  boast  of  his  freedom,  and  would  find  it  hard  to 


THE   PRESERVATION   OF   THE   UNION.  2G9 

cl  acover  wherein  it  ministers  to  his  elevation  or  his  hap- 
I  ness. 

The  freedom  of  a  British  working  man  consists  in  a 
1'mited  liberty  to  change  his  employer.  He  is  descended 
i  om  ancestors  who  toiled,  as  he  toils,  all  their  days  for 
i  >od,  clothing,  and  shelter,  and  these  scanty  in  quantity 
*md  poor  in  quality.  He  begets  a  posterity  to  whom  he 
i  'ansmits  his  poverty  and  his  hopelessness,  and  his  whole 
1  fe,  from  his  cradle  to  his  grave,  is  one  long,  desperate 
-  niggle  against  starvation  and  nakedness.  This  is 
]  Jritish  liberty  to  a  majority  of  the  people  of  England. 
'  'his  is  what  it  has  been  for  hundreds  of  years,  with  no 
]  >rospect  of  change  but  for  the  worse.  Legislation  has 
1  >een  tried  abundantly,  with  a  view  to  work  improvements, 
;  ,nd  with  worse  than  no  avail.  England  has  always  had 
,  ,nd  now  has  her  theorists  who  have  labored  to  create 
maginary  Utopias,  but  that  vast  war  debt,  which,  like  a 
nillstone,  is  grinding  the  people  to  powder,  and  pressing 
hem  into  the  earth,  is  a  thing  that  cannot  be  lifted  by 
institutional  clauses,  or  parliamentary  expedients.  That 
egislator  will  do  well,  Mr.  Speaker,  who  can  devise  an 
imendment  to  the  Constitution  which  shall  relieve  the 
>eople  of  the  United  States,  without  regard  to  color, 
from  the  pressure  of  a  war  debt  larger  in  proportion  to 
cheir  resources  than  that  of  Great  Britain.  The  debt  is 
inevitable,  it  already  exists,  it  is  being  increased  with 
giddy  rapidity.  There  is  nothing  in  our  institutions  to 
prevent  national  indebtedness  from  producing  the  same 
effects  upon  the  people  of  the  United  States  that  it  has 
produced  upon  the  people  of  Great  Britain.  Here  is  a 
thing,  sir,  which  may  well  enlist  the  wisdom  of  the  wisest 
statesmen  of  the  country.  If  nature  has  made  the  negro 
different  in  any  respect  from  the  white  man,  all  the  con- 
stitutional clauses. in  the  world  will  do  nothing  toward 
obliterating  that  difference.  If  it  has  made  the  negro 
like  the  white  man,  that  likeness  will,  at  the  proper  time, 
a— crt  itself  without  constitutional  assistance.  Nature 
n  neither  be  hindered  nor  accelerated  by  legislative 
contrivances,  and  no  more  than  the  European  can  the 
rican  be  elevated  to  any  valuable  purpose  by  the  will 
another. 


as: 
ca 


270  THE   PRESERVATION   OF   THE   UNION. 

It  was  declared  by  me  at  the  last  session  that  for  gen- 
erations to  come  the  laboring  men  of  the  United  States 
would  be  required  to  work  one  or  two  hours  in  each  day 
more  than  at  present,  in  order  to  pay  off  the  debt  con- 
tracted by  this  war.  Now,  sir,  under  all  the  advantages 
afforded  by  a  new  country,  and  circumstances,  in  many 
respects,  favorable  to  an  extraordinary  degree,  the  aver- 
age laboring  man  of  the  United  States  has  hitherto  done 
little  more  than  live.  Impose  upon  him  the  necessity  of 
two  hours  or  of  one  hour  additional  labor  per  diem  to 
support  himself  and  his  family,  and  he  is,  call  him  by 
what  flattering  title  you  may,  a  bondman.  Against  this 
bondage,  the  most  hopeless  and  inexorable  of  all  servi- 
tudes, no  constitutional  amendments,  however  cunningly 
devised,  will  afford  security ;  it  will  descend  from  father- 
to  son,  engraving,  as  it  does  in  England,  its  characters, 
revolting  and  indelible,  deeper  and  deeper  upon  each  suc- 
ceeding generation. 

Mr.  Speaker,  if  at  a  time  when  no  causes  of  excitement 
were  disturbing  the  minds  of  the  people,  a  despot  had 
arisen  over  us,  to  decree  and  enforce  upon  the  operative 
population  of  the  United  States  two  hours  per  day  of  ad- 
ditional labor  for  the  remainder  of  their  lives,  what  a  cry 
would  have  gone  up  from  all  parts  of  the  land  against  an 
act  so  tyrannical !  What  protest  would  have  been  en- 
tered by  such,  if  any  there  were,  who  were  permitted  to 
discuss  and  condemn !  What  exhortations  there  would 
have  been  to  combine  for  resistance,  and  what  citations 
of  principles  against  a  domination  so  heartless  and  de- 
structive !  What  pictures,  'at  once  true  and  revolting, 
would  have  been  drawn  of  the  degradation  of  the  people, 
broken  in  spirit  and  pressed  to  the  dust  by  excessive  toil 
and  intolerable  exaction,  and  what  fiery  indignation  would 
have  been  felt  and  expressed  against  the  unnatural  mon- 
ster by  whom  the  wrong  was  devised  and  executed  !  The 
result  is  not  altered  because  we  happen  to  reach  it  by  a 
process  less  direct.  The  evil  will  be  the  same,  the  wrong 
the  same,  the  same  the  suffering  when  the  excitement  has 
passed  away  and  the  fact  remains,  and  we  see  it  in  its 
nakedness  ;  but  then,  if  it  is  not  so  now,  it  will  be  too 
late  to  permit  the  discovery  to  be  of  much  avail. 


THE   PRESERVATION   OF  THE   UNION.  271 

Without  pursuing  this  point,  I  would  say  that  slavery 
1:1*  always  been  and  is  regarded  as  a  domestic  question. 
The  right  to  abolish  it  does  and  ought  to  rest  with  the 
^tates  iii  which  it  exists.  Since  the  organization  of  the 
Tovernment  the  law  of  climate  and  soil  has  controlled 
lie  subject,  and  has  caused  the  abolition  of  slavery  in  six 
>f  the  original  States,  and  either  abolished  or  prohibited 
t  in  all  but  nine  of  the  new  States  since  admitted.  This 
Grovermnent  is  one  of  delegated  powers,  and  those  not 
3onfenv<l  are  reserved  to  the  States  respectively  or  to  the 
people.  In  regard  to  slavery  the  Constitution  is  silent, 
m<l  therefore  no  power  exists  to  amend  it  in  the  respect 
indicated ;  and  in  addition,  in  my  judgment,  that  instru- 
ment contemplated  that  all  the  States  should  participate 
in  any  amendment  thereof.  Sir,  I  do  not  stand  here  as 
the  apologist  of  slavery,  but  merely  to  insist  that  we  have 
no  right  to  incorporate  the  proposed  amendment,  and  that 
even  if  the  right  exist  it  is  a  most  in  judicious  time  for  the 
exercise  of  the  power  when  we  should  desire  to  bring  back 
the  seceded  States  to  loyalty  and  obedience.  Our  action 
in  this  respect  cannot  fail  to  add  fuel  to  the  flame,  widen 
the  breach  already  existing,  further  embitter  the  South, 
and  prolong  the  sanguinary  contest.  I  do  not  regard  this 
question  as  having  been  decided  by  the  late  election. 
The  issue  there  involved  was  the  victorious  prosecution 
of  the  war  for  the  restoration  of  the  Union.  Entertain- 
ing these  ideas,  I  cannot  vote  for  the  proposed  amendment. 
Such  are  some  of  my  views,  Mr.  Speaker,  on  some  of 
the  most  important  questions  which  agitate  the  public 
mind  at  this  moment.  If  the  war  be  brought  to  a  close 
within  a  reasonable  time,  and  a  united  country  be  the 
result,  this  great  Republic,  with  its  immense  resources, 
will  spring  into  new  life,  and  under  the  blessed  reign  of 
peace  will  ultimately  shake  off  its  burdens  and  repose 
queen-like  among  the  nations  of  the  earth. 

We  must  be  prepared  to  make  still  greater  sacrifices 
than  any  that  have  gone  before,  if  necessary,  to  save  the 
Union  ;  but  the  considerations  to  which  I  have  adverted 
admonish  us,  as  I  have  observed  already,  not  to  prolong 
the  war  a  moment  longer  than  is  necessary  to  effect  the 
legitimate  object.  Let  us  be  careful  lest  in  seeking  to 


272  THE   PKESERYATION   OF   THE   UNION. 

obtain  a  fancied  benefit  for  others  we  do  not  destroy  our- 
selves. It  has  been  justly  said,  sir,  that  to  most  men  ex- 
perience is  like  the  stern-lights  of  a  ship,  which  illumine 
only  the  track  it  has  passed.  It  will  be  a  sad.  thing  for 
the  Republic  if  those  who  have  it  in  their  power  to  con- 
trol its  destinies  are  recorded  by  history  in  such  a  category. 
On  the  use  to  be  made  hereafter  of  the  light  of  experi- 
ence depends  our  whole  future  destiny.  It  is  to  decide 
whether  we  take  the  first  fatal  step  of  disintegration 
which  will  lead  us  to  the  position  of  those  petty  States 
whose  weight  in  the  world's  council  is  represented  by  a 
cipher,  and  whose  little  quarrels  only  provoke  a  smile,  or 
whether  we  remain  a  great  people — homogeneous,  united, 
and  powerful 


HE  BEST  POLICY  TOWARD  THE  SOUTHERN 

STATES. 


LETTER  TO  THE  NEW  YORK  WORLD,  Sept  6,  1875. 


In  the  summer  of  1875  Mr.  Ward,  being  desirous  of  promoting 
he  impartial  and  temperate  discussion  of  sound  political  principles 
is  applied  to  the  living  issues  of  the  times  and  of  indicating  such  a 
•ourse  as  should  be  supported  alike  by  just  and  thoughtful  men 
)f  both  parties,  addressed  to  the  New  i  ork  World  a  letter  on  the 
'  Principles  and  Policy  of  the  Democratic  Party."  lie  advo- 
cated such  reforms  as  would  best  secure  integrity  in  public  affairs, 
i  safe  and  gradual  return  to  a  redeemable  currency,  thorough  Te- 
nsion and  reform  of  the  tariff,  extension  of  our  trade  with  Can- 
ida,  Cuba,  and  Mexico,  and  the  obliteration  of  the  political  "  color 
ine  "  in  the  South,  together  with  the  maintenance  of  free  gov- 
ernment and  constitutional  liberty.  The  latter  subjects  are 
reated  in  the  following  extracts  from  his  letter : 

THE  rule  that  "honesty  is  the  best  policy"  is,  perhaps,. 
3ven  more  obviously  true  in  its  application  to  the  treat- 
nent  of  the  South  than  to  affairs  of  the  tariff  and 
iimuce.  The  manufacture  of  false  reports  of  Southern  out- 
rages has  run  its  course,  been  detected  and  exposed,  and 
is  no  longer  profitable  to  the  seekers  of  Northern  favor. 
The  misgovernment  of  our  Southern  fellow-citizens  has 
become  so  palpable  that  not  a  few  of  the  Republicans 
themselves  see  it  is  not  so  much  the  Southern  people  as 
the  party  in  power  that  needs  reformation.  One  01  their 
chief  leaders  acknowledges  that  "  it  is  not  the  disease  but 
the  doctors  that  we  ought  to  examine — it  is  not  the  ill- 
ness but  the  medicine  that  does  the  harm."  The  Admin- 
i-t ration  has  steadfastly  followed  the  course  of  those  dis- 
reputable practitioners  who  administer  drugs  to  drive  a 
patient  into  madness,  and  keep  him  in  confinement  under 
18 


274  BEST   POLICY   TOWARD   THE   SOUTH. 

false  certificates,  knowing  that  their  occupation  and  fees 
will  be  at  an  end  when  his  actual  condition  is  known. 

Considered  only  as  a  matter  of  self-interest,  the  pros- 
perity of  the  South  is  of  incalculable  importance  to  the 
Northern  people.  One  of  the  great  causes  of  stagnation 
in  the  Northern  manufactories  is  the  impoverished  con- 
dition of  the  South.  According  to  the  census  of  the  Uni- 
ted States,  the  production  of  the  great  staple  of  cotton, 
so  important  for  home  use  and  in  our  foreign  exchanges, 
shrank  from  nearly  five  millions  and  a  half  of  bales  in 
1860,  to  little  over  three  millions  in  1870.  The  produc- 
tion of  tobacco  decreased  in  far  larger  proportions. 
These  losses  are  not  counterbalanced  by  any  increase  in 
other  articles.  The.  production  of  the  cereals  decreased 
forty-four  per  cent.,  and  the  value  of  live  stock  twenty-six 
per  cent.  All  this  is  in  strong  contrast  to  the  prosperity 
of  the  previous  decade. 

Part  of  the  evil  influence  of  the  unscrupulous  adven- 
turers who  have  been  aided  by  the  civil  power  of  the  ad- 
ministration and  the  army  itself,  and  have  united  with  the 
managers  of  their  party  elsewhere  to  use  the  colored  vote, 
first  to  control  and  rob  the  South,  next  to  aid  in  govern- 
ing and  despoiling  the  people  of  the  North,  is  clearly 
shown  by  an  examination  of  the  debts  and  liabilities  in- 
curred in  the  Southern  States  since  the  close  of  the  war. 
At  that  time,  the  amount  in  Georgia  and  Texas  was 
merely  nominal,  but  on  January  1,  1872,  as  shown  in 
the  Ku-Klux  Report  of  that  year,  it  was  over  fifty  mil- 
lions in  the  former  and  twenty  millions  in  the  latter 
State.  Since  the  war  ended,  up  to  January,  1870,  the 
debts  and  liabilities  of  the  various  Southern  States  grew 
from  eighty  seven  millions  to  three  hundred  and  sixty- 
two  millions — a  net  increase  of  over  two  hundred  and 
seventy-five  millions.  This  vast  sum  has  mainly  been 
squandered  or  stolen,  not  fairly  invested  for  the  benefit  of 
the  people  to  whom  it  belonged,  and  the  true  value  of 
whose  property  during  the  ten  years  between  1860  and 
1870  was  diminished  to  the  amount  of  over  two  thousand 
millions  of  dollars,  as  shown  by  the  census  of  the  United 
States. 

The  indignation  of  the  Southern  whites  against  the 


BEST   POLICY   TOWARD   THE   SOUTH.  275 

spoliation  to  which  they  were  thus  subjected,  by  the  aid 
of  the  Administration  and  Congressional  majority,  was 
further  aroused  by  the  federal  office-holders,  who,  with 
their  adherents  and  the  support  of  their  party  at  Wash- 
ington, controlled  elections,  and  tampered  with  the  courts 
and  usurped  their  power.  Legislatures  were  seized,  need- 
less and  obnoxious  acts  passed,  and  nothing  was  neglected 
to  foster  and  perpetuate  enmity  and  strife  between  the 
two  races.  A  regard  for  the  real  interests  of  the  colored 
men,  which  could  only  be  promoted  by  advancing  his 
sense  of  political  justice,  in  harmony  with  the  interests  of 
the  whites,  was  no  part  of  the  schemes.  The  old  pro- 
verbial game  of  oppressors,  to  divide  the  people  against 
each  other,  so  as  to  conquer  and  rob  them  all,  was  never 
more  recklessly  pursued  than  in  the  two  successful  efforts 
to  set  race  against  race,  and  the  North  and  South  against 
each  other.  The  beneficial  restoration  of  concord  and 
the  Union  can  only  be  effected  by  fair  dealing  and  con- 
stitutional liberty. 

Directly  injurious  as  the  impoverished  and  dishonestly 
taxed  condition  of  the  South  is  to  the  Northern  people, 
its  dangers  are  secondary  in  importance  to  the  results 
which  must  follow  to  the  people  of  the  whole  Union  if 
the  continuation  of  military  interference  and  despotism, 
such  as  have  been  conspicuously  exemplified  in  Georgia, 
Louisiana,  and  Arkansas,  is  permitted.  All  simply  local 
and  domestic  matters  must,  under  the  Constitution,  be  left 
to  the  people  of  the  States.  At  last,  the  practices  of  the 
Republican  party  are  echoed  in  the  speeches  of  its  leaders, 
who  attempt  to  justify  the  progress  of  centralization — a 
system  absolutely  contrary  to  all  free  and  especially  to 
all  really  republican  government. 

One  of  the  first  objects  in  the  Democratic  Southern 
policy  should  be  to  destroy  the  political  "  color-line," 
which  it  has  been  the  constant  aim  of  those  who  had  no 
desire  for  the  welfare  either  of  the  white  or  colored  race 
to  intensify  to  the  utmost.  If  it  should  be  perpetuated, 
and  the  colored  people  continue  to  be  made  the  tools  of 
those  who  maintain  corrupt  government  both  at  the 
South  and  North,  the  ultimate  result  will  be  especially 
disastrous  to  those  who,  in  comparison  with  the  rest  of 


276  BEST   POLICY   TOWARD   THE   SOUTH. 

the  population  of  the  Union,  are  in  a  small  minority. 
Their  practical  welfare  can  best  be  promoted  by  such  a 
general  prosperity  of  the  South  as  will  give  them  a  fair 
day's  wages  for  a  fair  day's  work,  and  improve  their 
education  and  sound  intelligence  on  public  affairs,  so  that 
by  their  own  free  and  honest  efforts  they  may  earn  the 
respect  of  all  men,  and,  judging  for  themselves  on  political 
questions,  may  be  independent  of  dictation  by  sordid  and 
selfish  intriguers.  When  the  Federal  Government  ceases 
to  interfere  in  the  affairs  of  separate  States,  and  is  repre- 
sented in  the  South  by  office-holders  whose  character  will 
command  respect  and  esteem,  a  complete  and  harmonious 
settlement  of  the  political  questions  in  those  States  will 
soon  be  attained.  Attachment  to  the  Union  will  be  in- 
creased when  an  Administration  fulfils  the  duty  of  making 
union  a  blessing." 


THE  SHIPPING  ACT— RELATING  TO  MER- 
CHANT SEAMEN. 


HOUSE  OP  REPRESENTATIVES,  June  1,  1876. 


Under  the  original  statute  relating  to  merchant  seamen  much 
good  had  been  effected  for  sailors  and  ship-owners ;  but  it  was 
novel  legislation  and  many  unforeseen  abuses  arose,  chiefly  from 
want  of  needful  responsibility  on  the  part  of  the  commissioners 
entrusted  with  the  chief  duties  prescribed.  To  remedy  these  de- 
fects Mr.  Ward,  on  behalf  of  the  Committee  on  Commerce,  re- 
ported a  series  of  amendments  and  made  the  following  speech  in 
their  support.  The  House  adopted  them  by  a  large  majority. 

MR.  SPEAKER  :  The  act  known  as  the  u  Shipping  Act  of 
1872,"  relating  to  merchant  seamen,  and  being  title  53  of 
the  Revised  Statutes,  has,  in  many  important  respects, 
fulfilled  the  intentions  of  its  framers,  but  has  been  found 
practically  deficient  in  some  of  its  provisions,  and  thus 
the  benefits  expected  from  its  operations  have  been  ma- 
terially abridged  and  serious  abuses  have  been  called  into 
existence.  It  has  been  in  operation  from  August,  1872, 
to  the  present  time,  and  there  has  been  ample  opportuni- 
ty to  judge  fairly  of  its  merits  and  defects. 

The  well-known  character  of  the  sailor  and  his  essen- 
tially peculiar  mode  of  life  have  long  ago  led,  in  the 
lea<ling  maritime  nations,  to  the  enactment  of  laws  for 
his  protection,  especially  as  to  his  shipment  and  discharge 
from  service.  His  occupation  is  pursued  remotely  from 
society  at  large  and  under  discipline  necessarily  strict 
and  to  a  great  extent  arbitrary.  Released  from  his  cus- 
tomary restraints,  with  his  pay  in  his  pocket  and  a  stran- 
ger amongst  strangers,  he  naturally  becomes  liable  to 
temptations  and  impositions ;  and  the  opportunities  thus 
afforded  attract  a  class  of  men  who  are  to  be  found  in 


HJU.UJ  U.CM 


278  RELATING    TO   MERCHANT   SEAMEN. 

every  seaport  ready  to  take  advantage  of  his  circum- 
stances and  make  him  their  prey. 

As  the  laws  of  other  countries  competing  with  us  for 
the  great  prizes  of  the  shipping  trade  secured  for  their 
seamen  special  advantages  which  our  own  did  not  enjoy, 
our  commerce  suffered  from  the  want  of  enactments  duly 
protecting  our  sailors,  whose  condition  in  our  seaports 
was  one  of  great  injustice  to  themselves  and  other  citi- 
zens, and  disgraceful  to  our  country. 

It  was  the  common  habit  of  a  large  class  of  men  who 
infested  the  seaports  to  pander  the  grossest  appetites  of 
the  sailor,  and  taking  advantage  of  his  inexperience  and 
the  exhilaration  naturally  produced  by  his  being  ashore, 
and  his  freedom  from  restraint,  to  keep  him  in  a  state  of 
excitement  and  intoxication,  so  that  he  became  powerless 
in  their  hands.  He  was  liable  not  only  to  be  cheated 
and  robbed  of  his  wages  to  an  extent  that  could  not  be 
practised  on  any  other  class  of  men,  but  his  labor  was 
often  sold  and  his  services  were  engaged  for  long  voyages 
when  he  was  unconscious  of  the  nature  of  the  agreement 
he  was  making.  Sometimes,  when  he  imagined  he  had 
contracted  for  a  short  trip,  he  found  himself  in  a  vessel 
bound  for  the  East  Indies  or  China.  There  were  not  a 
few  instances  where  mechanics  and  persons  of  various 
other  pursuits  in  the  city  or  rural  districts  were  drugged, 
carried  to  the  ship,  and  passed  off  as  good  sailors,  their 
captors  pocketing  their  advance  wages,  they  themselves 
incapable  of  performing  duties  at  sea  and  the  ships  en- 
dangered by  being  insufficiently  manned. 

Extortion  of  the  most  flagrant  kinds  was  practised. 
Both  sailors  and  ship-masters  were  victims.  When  men 
were  abundant  a  large  proportion  of  the  sailor's  wages 
was  taken  from  him  for  securing  his  shipment.  The  con- 
sequences of  this  infamous  treatment  and  of  his  being  fre- 
quently shipped  while  unconscious  of  what  he  was  doing, 
were  that,  he  worked  grudgingly  and  under  a  sense  of 
injury  on  board  ship,  the  captain  found  difficulty  in  man- 
aging him,  and  he  frequently  deserted  at  the  first  port 
where  he  landed,  taking  his  chance  of  shipping  again  under 
some  different  name.  When  there  was  a  scarcity  of  sail- 
ors similar  extortion  was  practised  on  the  ship-owners, 


RELATING   TO   MERCHANT   SEAMEN.  27'J 

but  frequently  there  was  a  combination  among  the  more 
powerful  parties  to  the  bargains,  the  sailor  himself  being 
the  chief  sufferer,  not  only  from  the  condition  to  which 
he  was  reduced,  but  because,  from  the  nature  of  his  voca- 
tion, he  was  only  a  transient  stranger.  It  could  only  be 
expected  that  in  such  a  state  of  affairs  between  officers 
and  crew,  separated  by  a  wide  expanse  of  waters  and  long 
intervals  of  time  from  ordinary  society  and  its  laws,  dis- 
cipline might  often  degenerate  into  tyranny  and  cruelty 
on  one  side,  and  that,  on  the  other,  insubordination  and 
even  mutiny  might  arise. 

The  well-known  existence  of  these  evils  long  attracted 
the  attention  of  philanthropic  persons,  whose  exertions 
led  to  the  passage  of  the  act  now  under  consideration. 
The  preponderating  weight  of  the  most  reliable  informa- 
tion from  the  various  ports  shows  that  under  its  operation 
the  wrongs  already  described  have  been  checked  or  de- 
stroyed, and  the  examples  made  of  offenders  have  induced 
a  salutary  fear  of  detection,  exposure,  and  punishment. 
There  has  been  a  marked  improvement  in  the  condition 
of  seamen,  and  the  ship-owners,  many  of  whom  were  at 
first  opposed  to  the  act,  have  found  benefit  from  some  of 
its  provisions. 

(Although,  for  the  most  part,  the  opinion  of  those  who 
have  made  due  investigation  is,  in  the  language  of  a  report 
adopted  by  the  New  York  Ship-Owners'  Association,  after 
being  carefully  prepared  by  a  committee  of  six  of  its  mem- 

Ibers,  that  the  act  is,  on  the  whole,  beneficial  to  the  inter- 
ests of  both  sailors  and  ship-owners,  if  properly  inter- 
preted and  administered  in  accordance  with  what  the  com- 
mittee believe  to  have  been  the  intention  of  its  f ramers, 
the  conclusion  is  yet  more  generally  admitted  that  the 
law  is  not  free  from  defects,  but  is  capable  of  improve- 
ment. It  is  believed  that,  by  judicious  and  much-needed 
amendments,  many,  if  not  all,  of  the  objections  conscien- 

Itiously  entertained  against  the  act  will,  in  due  time,  be 
removed. 
The  provisions  of  the  act  are  numerous,  but  its  main 
object  is  t<>  provide  an  officer  to  see  that  no  foul  phiy 
is  practised  on  the  seaman  or  his  employer  in  the  en- 
gagement or  discharge  of  crews.  The  commissioner 


280  RELATING  TO   MERCHANT   SEAMEN. 

appointed  for  these  purposes  is,  in  order  to  execute 
them  satisfactorily,  invested  with  various  powers  which 
might  be  safely  intrusted  to  a  thoroughly  just  and 
firm  man,  but  are  liable  to  many  perversions.  In  view 
of  the  crimes  it  was  intended  to  prevent,  the  essential 
rule  of  making  him  duly  responsible  was  neglected.  The 
natural  result  has  followed,  that  the  shipping  commis- 
sioners, being  actually  responsible  to  no  one  particu- 
larly, often  perverted  the  powers  intrusted  to  them, 
have  seldom  made  proper  reports,  and  are  virtually 
and  practically  "  a  law  unto  themselves." 

As  New  York  is  the  chief  shipping-port  of  the  Uni- 
ted States,  the  merits  and  defects  of  the  law  and  the 
enormity  of  the  abuses  which  exist  under  it  are  most 
plainly  visible  there.  In  various  degrees  the  same  re- 
sults may  be  seen  in  other  seaports. 

The  act  directs  that  to  provide  means  for  the  pay- 
ment of  the  commissioner  and  the  execution  of  his 
duties,  specified  fees  shall  be  paid  to  him  on  the  en- 
gagement and  discharge  of  seamen ;  that  his  compensa- 
tion shall  not  exceed  $5,000  a  year ;  and  that  he  shall 
pay  the  surplus  into  the  Treasury  of  the  United  States. 
It  does  not  appear  that  the  commissioner  at  New 
York  has  ever  paid  any  of  the  fees  into  the  Treasury, 
although  they  have  greatly  exceeded  the  sum  he  was 
authorized  to  retain,  but  has  expended  them  in  a  man- 
ner directly  in  violation  of  the  provisions  of  the  act. 
The  first  five  months  of  its  operation  ended  Decem- 
ber 31,  1872.  During  that  time  the  fees  received 
amounted  to  $22,112,  but  the  expenditures  of  the  com- 
missioner were  $23,168.87,  leaving  an  alleged  balance 
of  $1,056.87  due  to  him.  Thus  he  appropriated,  for 
such  uses  as  he  arbitrarily  chose,  the  sum  of  $21,085.53 
during  the  first  few  months  of  his  tenure  of  office.  In 
1873  the  amount  of  fees  collected  was  $38,267.50,  all  of 
which  was  expended  or  retained,  and  a  claim  made  of  the 
further  sum  of  $1,088.61,  aa  due  to  him.  In  1874  the 
number  of  attaches  to  his  office  was  diminished,  but  he 
managed  to  expend  the  whole  amount  of  fees,  being 
$56,169,  and  claimed  as  due  to  him  the  further  sum  of 
$805.57.  There  is  no  satisfactory  reason  for  this  sudden 


y 


RELATING   TO   MERCHANT   SEAMEN.  281 

increase  of  nearly  $20,000  in  the  alleged  expenditures  of 
that  year  over  the  one  next  preceding  it.  In  1875  the 
amount  of  fees  received  was  $51,718.50,  and,  perhaps  un- 
der a  salutary  fear  of  the  direction  of  public  attention,  or 
in  pursuance  of  the  rule  of  spending  all  the  money  that 
came  under  his  control,  the  expenditures  reported  by  the 
commissioners  were  $51,440.29,  including  the  balance  due 
for  the  previous  year. 

An  analysis  of  the  expenditures  of  the  commissioner 
shows  that  to  a  most  serious  extent  they  were  made  for 
his  personal  ends  and  in  gross  violation  of  the  law.  The 
act  provides  that  he  may  "  engage  a  clerk  or  clerks  to 
assist  him  and  to  act  as  deputies  at  his  own  proper  cost." 
Regardless  of  this  direction  he  engaged  six  clerks,  at  a 
salary  of  $1,300  each ;  eleven  agents  and  others,  at  sala- 
ries amounting  to  $10,660;  a  deputy,  at  $2,400;  and 
paid  each  of  four  of  his  own  sons  a  salary  of  $2,500. 
All  these  salaries  were  paid  out  of  the  fees,  and  in  addi- 
tion to  his  own  salary  of  $5,000,  although,  as  has  been  al- 
ready shown,  he  was  only  authorized  to  engage  any  clerks 
or  deputy  by  paying  the  salary  "  at  his  own  proper  cost." 

Among  these  glaring  violations  of  the  law,  the  appoint- 
ment by  the  commissioner  of  no  less  than  four  of  his  own 
sons,  at  salaries  of  $2,500  each,  is  not  the  least  conspicu- 
ous and  flagrant.  The  salary  is  more  than  that  paid  to 
his  deputy,  and  it  is  obvious  that  fair  and  just  decisions 
could  not  be  expected  from  him  in  any  of  the  cases  where 
the  appeal  might  be  made  to  the  commissioner  in  the  in- 
terest of  the  seaman's  or  public  rights  against  any  of  his 
sons  thus  favored  and  exorbitantly  paid  from  the  money 
collected  from  the  seaman.  The  committee  are  fully 
satisfied  that  the  duties  of  the  shipping  commissioner  can 
!>'•  discharged  for  much  less  than  is  claimed  for  that  pur 
]•<>-<•.  The  amount  fixed  by  the  act  is  probably  inade- 
quate, but,  so  long  as  it  is  thus  limited,  due  compliance 
should  be  made  with  the  law. 

The  act  requires  the  commissioner  to  rent,  lease,  or  pro- 
cure, at  his  own  cost,  suitable  premises  for  the  transaction 
of  business.  But  he  rented,  as  commissioner,  from  an  as- 
sociation of  which  he  WMS  president,  an  office  for  the  an- 
nual rent  of  $5,500,  which  he  pays  out  of  the  fees  coming 


282  RELATING    TO    MERCHANT    SEAMEN. 

into  liis  Lands  as  commissioner,  and  not,  as  provided  by 
law,  out  of  his  own  salary.  The  rent  paid  by  him  as 
commissioner  to  the  association  of  which  he  is  president 
is  not  far  from  ten  times  the  actually  fair  rental  of  such 
premises  as  are  required,  he  paying  $5,f>00,  while  rooms 
more  conveniently  located  for  the  performance  of  the  du- 
ties with  which  he  is  charged  could  be  had  from  $500  to 
$700.  At  Philadelphia  the  rent  paid  for  such  an  office 
was  $350.  The  office  for  which  the  exorbitant  rent  of 
$5,500  is  paid,  for  the  use  of  the  commissioner,  is  at  a 
very  inconvenient  distance  from  the  custom-house.  Thus 
much  vexation  and  loss  has  arisen,  and  in  many  instances 
the  delay  has  been  so  great  that  the  departure  of  vessels 
for  a  whole  day  has  been  postponed  simply  for  the  neces- 
sity that  captains  should  visit  the  office  and  return  to  the 
custom-house.  It  is  regarded  as  a  defect  in  the  act  that 
there  is  no  specific  provision  by  which  parties  who  are  ag- 
grieved can  present  their  cases  on  points  requiring  a  strict 
construction  of  the  law.  All  cases  at  New  \rork  in  which 
such  construction  was  asked  have  been  presented  by  the 
commissioner  himself  ex  parte. 

In  San  Francisco,  Boston,  Philadelphia,  and  other  sea- 
ports the  same  violation  as  exists  at  New  York  of  the 
provisions  of  the  act,  so  far  as  regards  the  expenditure 
of  the  fees  which  are  paid  to  the  commissioners,  has  pre- 
vailed. In  Philadelphia  numerous  complaints  have  also 
been  made  in  other  particulars,  indicating  the  expediency 
of  a  change  in  the  appointing  power.  Applications  have 
been  made  for  a  total  repeal  of  the  act,  as  well  as  for 
amendments  to  it.  It  is  deemed  more  desirable  to  remedy 
its  defects  than  to  destroy  it. 

The  primary  and  essential  reform  most  imperatively 
demanded  in  the  law  is  that  the  power  of  appointing  the 
shipping  commissioners  shall  cease  to  be  given  to  the 
United  States  courts  which  have  jurisdiction  in  maritime 
cases,  and,  to  take  the  most  pleasant  view  of  the  matter, 
whose  judges,  having  selected  their  appointees  from  con- 
fidence in  them,  cannot  be  regarded  as  impartial  judicial 
authority  in  matters  to  which  the  appointees  are  parties. 
It  is  obviously  inexpedient  to  blend  the  judicial  and 
executive  or  appointing  power.  The  office  of  the  com- 


RELATING   TO   MERCHANT   SEAMEN.  283 

i  lissioner  is  created  and  held  under  the  law  of  the  United 
I-  tates.     Under   these   circumstances,  the   proposed   bill 
roviilc.s  that  the  power  of  appointing  the  commissioners 
hall  }>e  vested  in  the  Secretary  of  the  Treasury  of  the 
!Jnited   States,  and  that,  under  certain  restrictions,  he 
hall  regulate  the  amounts  of  their  salaries,  their  modes 
1  >f  conducting  business,  and  the  number  and  salaries  of 
he  clerks  and  other  persons  in  their  employ.     More  than 
jnough  has  been  brought  before  the  Committee  on  Com- 
nerce  to  prove  the  abuses   existing   under   the  present 
rresponsible  and  arbitrary  system.     It  is  believed  that 
i  these  fundamental  changes  and  such  other  amendments 
as  are  herewith   submitted  are  made,  the  law  will  be 
justly  and  efficiently  administered,  and  become  deserv- 
edly popular  among  those  whom  it  chiefly  intended  to 
benefit. 

I  will  endeavor  to  present  separately,  and  as  briefly  as 
possible,  the  various  reasons  for  the  several  amendments 
now  proposed. 

Section  4501  :  The  change  removing   the  appointing 
power  from  the  several  circuit  courts  to  the  Secretary  of 
the  Treasury  is  the  main  reform  proposed  in  this  amend- 
ment.    It  is  contrary  to  sound  public  policy  to  blend  to- 
gether the  creative  and  judicial  functions.     This  may  be 
regarded  as  an  axiom  in  legislation.     The  interests  of 
justice  demand  compliance  with  the  rule.     The  courts, 
however  desirous  of  being  impartial,  can  scarcely  be  fair 
judges  between  strangers  and   those   appointees  whom 
they  have  selected  either  from  friendship  or  from  confi- 
dence in  their  character.     In  fact,  the  greater  the  confi- 
dence of  the  courts  the  less  impartial  are  they  likely  to 
Experience  in  the  various  ports  has  amply  confirmed 
this   view,    and    the   amendment   is   almost  universally 
•  Ir-ired  by  the  people  who  are    most  deeply  interested 
in  the  success  of  the  title.     They  deem  it  essential  that 
this  alteration  should  be  made  in  order  to  insure  them  a 
due  measure  of  justice.     Under   the  present   law  some 
mmissioners  have  discharged  their  duty  with  fidelity, 
ut  in  other  instances  their  conduct  has  been  arbitrary 
and  unjust  to  the  sailors,  and  public  interests  and  money 
have  been  sacrificed  to  personal  gain.  The  law  as  it  now  is 


; 


a  n 

c 


284  RELATING   TO   MERCHANT   SEAMEN. 

left  them  irresponsible  and  practically  "  laws  unto  them- 
selves." 

After  reading  and  explaining  the  various  amendments,  Mr. 
Ward  continued : 

The  amendments  are  in  the  main  very  simple,  although 
it  has  taken  some  time  to  read  and  explain  them.  I  am 
expressing  the  unanimous  sentiment  of  the  Committee 
on  Commerce  in  saying  that  these  amendments  are  cer- 
tainly needed.  The  only  objection  that  I  have  heard 
raised  to  this  bill  (except  in  the  case  of  one  or  two 
charitable  bodies  in  New  York  City)  comes  from  those 
who  hold  places  as  commissioners.  We  have  received 
from  different  sections  of  the  country  many  petitions 
and  letters  of  the  most  urgent  character  in  favor  of  these 
changes  in  the  law. 

I  wish  to  say,  for  the  Committee  on  Commerce  and  for 
myself,  that  we  have  no  other  object  in  proposing  these 
changes  than  to  remove  the  imperfections  of  the  existing 
law  and  render  it  more  efficient.  It  is  believed  that 
some  central  power  is  essential  to  give  effect  to  the  law. 
It  was  but  the  other  day  that  I  was  constrained  to  ask 
this  House  to  pass  a  law  in  order  that  the  commissioners 
may  be  checked  in  libelling  vessels  in  direct  conflict  with 
the  act.  They  have  acted  in  entire  disregard  of  any 
authority  except  themselves  ;  and  their  conduct  has  been 
the  means  of  making  the  law  very  odious  and  very 
unpopular.  If  the  House  should  now  pass  this  bill,  the 
law  may  hereafter  require  further  amendment  before  it 
shall  be  fully  perfected.  When  the  occasion  for  such 
amendments  become  manifest,  they  can  be  made.  I  now 
move  the  previous  question. 


A  COINAGE  DEPARTMENT  IN  THE  ASSAY 
OFFICE   IN  NEW  YORK; 

ITS   UTILITY  TO 

COMMERCE  AND  IMPORTANCE  ON  GROUNDS  OF  LOCAL 
AND   NATIONAL  JUSTICE  AND   ECONOMY. 


HOUSE  OP  REPRESENTATIVES,  February  1,  1877. 


During  the  last  thirty  or  forty  years  the  Hon.  Robert  J.  Wal- 
ker, Hon.  Thomas  Corwin,  Hon.  William  H.  Seward,  and  many 
others,  without  distinction  of  section  or  party,  have  urged  the  ex- 
pediency of  coinage  in  New  York  as  the  commercial  metropolis 
of  the  Union.  On  the  10th  of  October,  1854,  an  assay  office,  at 
which  bars  of  the  precious  metals  are  prepared  and  issued,  was 
established.  The  results  are  most  decisive  proofs  of  the  tendency 
to  bring  gold  and  silver  to  New  York  rather  than  to  any  other 
place  east  of  the  Rocky  Mountains.  In  1876  for  instance,  the 
value  of  the  bars  issued  at  New  York  was  nearly  nine  millions, 
and  at  Philadelphia  and  Boise  added  together  less  than  two  hun- 
dred thousand.  At  New  York  there  is  for  payment  of  duties  and 
other  purposes  a  greater  need  of  specie  than  in  any  other  city  of 
the  Union.  Hence  Mr.  Ward  thought  it  expedient  to  lay  before 
Congress  and  the  country  an  epitome  of  arguments  and  facts 
proving  the  expediency  of  conferring  the  privilege  of  coinage 
upon  the  Assay  Office  in  New  York. 


MR.  SPEAKER  :  Having  in  the  preceding  session  of  Con- 
gress introduced  a  bill  providing  for  coinage  in  New 
York,  and  as  the  committee  to  whom  it  was  referred 
have  omitted  to  report  thereon,  and  the  bill  now  under 
consideration  is  the  one  through  which  appropriations 
for  coinage  are  made,  I  deem  the  present  opportunity 
suitable  for  calling  the  attention  of  the  House  to  a  sub- 
ject of  much  importance,  not  only  to  the  city  and  State 


286      A   COINAGE   DEPARTMENT  IN   NEW   YORK. 


I  have  in  part  the  honor  of  representing,  but  also  to  the 
country  at  large. 

The  signs  of  the  times  unequivocally  demonstrate  that 
inflation  can  no  longer  inflate,  and  that,  by  a  natural  re- 
action, a  most  favorable  time  to  prepare  for  specie  pay- 
ments is  near  at  hand.  Gold  has  lately  been  at  a  pre- 
mium of  less  than  five  per  cent.  Our  exportations  of  it 
are  large  ;  our  mines  are  producing  vast  quantities  of  the 
precious  metals ;  and  currency  is  yet  abundant  at  low 
rates  of  interest,  although  during  the  year  ended  on  the 
1st  day  of  November,  1876,  there  had  been  a  decrease  of 
nearly  $25,000,000  in  the  amount  of  national  bank  notes. 
Since  the  act  of  June  20,  1874,  came  into  operation,  the 
outstanding  amount  of  these  notes  has  been  reduced  $32,- 
300,000.  Between  January  14,  1875,  and  January  1, 
1877,  the  reduction  in  the  amount  of  legal- tender  notes 
was  $15,900,000,  and  the  amount  of  legal-tender  notes 
lately  deposited  in  the  Treasury  to  provide  for  further 
withdrawals  of  bank-notes  was  $18,900,000.  The  three 
items  indicate  a  contraction  amounting  to  $67,100,000  in 
the  circulation  of  the  two  classes  of  notes  between  June 
20,  1874,  and  January  1,  1877.  This  is  about  nine  per 
cent,  of  the  whole  paper  currency.  The  natural  laws  of 
finance  are  asserting  their  power.  Arbitrary  and  doubt- 
ful measures  for  the  restoration  of  a  sound  currency  re- 
deemable in  the  metallic  standard  of  the  world  are  no 
longer  necessary.  It  seems  impossible  that  those  to 
whom  the  legislation  of  our  country  in  monetary  as 
well  as  in  other  affairs  is  intrusted  should  not  patrioti- 
cally take  advantage  of  so  golden  an  opportunity  to  con- 
fer incalculable  benefits  upon  the  people.  My  purpose  at 
present  is  simply  to  urge  the  adoption  of  one  of  the  most 
important  means  of  aiding  in  the  restoration  of  specie 
payments  by  removing  unnecessary,  expensive,  and  un- 
just obstacles  to  their  essential  precursor,  conversion  of 
the  precious  metals  into  the  coin  of  our  own  country. 

While  I  am  desirous  of  applying  the  principles  of  jus- 
tice and  good  will  in  the  fullest  measure  to  all  other  parts 
of  our  country,  I  deem  it  my  duty  to  state  what  is  strictly 
due  as  regards  coinage  to  the  city  I  have  in  part  the  honor 
of  representing.  In  one  year  alone  there  were  sent  from 


A   COINAGE   DEPARTMENT   IN   NEW   YORK.       287 

;he  assay  office  in  New  York  to  Philadelphia  for  coinage 
ao  less  than  $62,480,508  in  gold  and  $2,663,046  in  silver. 
That  certainly  was  an  exceptional  year,  but  during  the 
twenty-one  years  which  have  elapsed  between  the  time 
when  the  assay  office  in  New  York  was  organized,  and 
December,  1875,  the  amount  of  bullion  thus  transmitted 
was  no  less  than  $172,221,463,  at  a  cost  of  $182,281,  a 
waste  of  money  and  labor  as  complete  as  any  ever  typi- 
fied in  modern  proverbs  or  ancient  mythology.  As  we 
seem  to  approach  nearer  to  specie  payments  the  amount 
of  the  bullion  thus  transmitted  increases.  In  the  three 
years  ended  with  1875  it  was  two  and  a  half  times  as 
large  as  in  the  three  preceding  years.  In  these  calcula- 
tions the  amount  of  the  silver  purchased  for  coinage  un- 
der the  provisions  of  the  law  of  1873  and  subsequent  acts 
now  in  operation  is  not  included.  Its  amount,  passing 
from  and  through  New  York  to  the  Mint  at  Philadelphia 
during  the  last  two  years,  may  be  computed  at  millions. 
During  the  two  years  and  a  half  ended  on  the  30th  of  last 
December,  the  amount  of  gold  and  silver  bullion  trans- 
mitted from  the  assay  office  in  New  York  to  the  Mint  at 
Philadelphia  was  no  less  than  $22,487,803,  and  the  char- 
ges of  the  transmission  were  $22,680.05.  The  amount 
thus  transmitted  is  no  fair  criterion  of  that  which  would 
have  been  coined  in  New  York  if  the  needed  facilities  for 
that  purpose  had  existed  there  and  the  loss  of  time  as 
well  as  the  cost  of  transportation  had  been  avoided.  The 
means  thus  wasted  would  undoubtedly  have  been  much 
larger  if  for  the  last  sixteen  years  the  ordinary  and  natu- 
ral demand  for  specie  had  not  been  checked  by  legisla- 
tion. Yet  under  these  circumstances  the  direct  and  need- 
less expense  thus  actually  incurred  for  transportation  of 
bullion  since  the  establishment  of  the  assay  office  was  over 
$200,000.  I  do  not  believe  there  has  ever  existed  under 
<>ur  Government  any  more  flagrant  instance  of  the  power 
of  habit  and  established  patronage  in  resisting  a  most 
just  and  needful  conformity  to  the  requirements  of  the 
times. 

For  at  least  thirty  or  forty  years  the  justice  and  expe- 
diency of  converting  bullion  and  the  gold  and  silver  cur- 
rency of  other  countries  into  our  national  coin  at  New 


288      A   COINAGE   DEPARTMENT   IN   NEW   YORK. 

York  have  been  urged  by  leading  statesmen,  irrespective 
of  party  or  the  locality  of  their  residences.  The  Hon. 
Robert  J.  Walker,  in  four  successive  annual  reports,  with 
arguments  which  it  is  impossible  to  controvert,  earnestly 
directed  public  attention  to  the  subject,  and  the  same  re- 
commendations were  made  by  the  Hon.  Thomas  Corwin, 
Hon.  William  H.  Seward,  and  many  others.  The  right 
was  not  sought  for  New  York  or  for  the  benefit  of  its 
commerce  only,  but  for  the  benefit  of  the  whole  Union. 
No  unjust  or  exclusive  advantage  was  asked  for  that  city, 
but  simply  that  the  great  centre  of  our  foreign  and  home 
trade  should  have  equal  facilities  with  other  cities  of  less 
commercial  importance  for  coinage  and  recoinage. 

Apart  from  the  commercial  emporium  to  which  the 
precious  metals  are  first  brought  from  the  places  of  their 
production  on  the  other  side  of  the  continent,  it  is  evi- 
dent that  where  the  chief  market  of  commerce  is  there 
also  the  precious  metals  will  centre,  and  it  is  no  less  clear 
that  in  the  same  place  there  should  be  every  opportunity 
for  increasing  their  value  and  bringing  them  into  active 
use.  While  this  is  true  at  all  times  it  is  especially  so  at 
present,  when  the  people  are  desirous  of  a  safe  and  eco- 
nomical return  to  a  currency  at  par  with  the  commercial 
standard  of  the  world. 

It  may  be  argued  that  the  impediments  to  coinage  by 
compelling  the  citizens  of  the  centre  of  the  exchanges  of 
the  Union  to  carry  their  specie  to  and  fro,  for  hundreds 
of  miles,  are  to  some  extent  removed  by  modern  facili- 
ties for  rapid  transit ;  but,  whatever  the  cost  thus  in- 
curred for  freightage  may  be,'  it  is  to  that  extent  a  tax, 
primarily  upon  New  York,  but  ultimately  upon  the 
nation  and  an  obstacle  to  its  foreign  and  domestic  trade. 
In  our  commercial  system,  bullion  and  coin,  the  represent- 
atives of  value  and  current  circulation  among  all  na- 
tions, pass  and  repass  to  and  from  New  York  as  the 
blood  in  the  human  system  tends  toward  the  heart  and  is 
thence  distributed  again. 

The  risk,  expense,  and  delay  of  sending  the  precious 
metals  from  their  natural  emporium  to  be  coined  else- 
where, must,  so  long  as  they  are  continued,  be  hindran- 
ces to  the  production  of  the  coins  of  the  United  States, 


A   COINAGE   DEPARTMENT   IN   NEW   YORK.       289 

md  tend  to  keep  the  precious  metals  out  of  common  use. 
Millions  of  dollars  arc  thus  as  utterly  lost  to  the  industry 
ind  business  of  the  country  as  if  they  were  thrown  into 
;he  sea.  Coinage  of  a  metallic  currency  is  prohibited  at 
;he  place  where  the  Government  collects  its  chief  re  ve- 
in e  in  coin.  Needless  and  artificial  obstacles  created  by 
law  are  kept  in  the  way  of  an  abundant  supply  of  the 
stable  currency  most  needed  for  a  return  of  general  pros- 
perity. As  gold  and  silver  are  articles  of  commerce, 
they  naturally  gravitate  from  all  quarters  to  the  com- 
mercial centre  of  our  country.  They  are  brought  there 
not  only  from  our  own  mines,  but  from  Mexico,  Peru, 
Chili,  Central  America,  Europe,  and  all  other  regions  of 
the  world,  as  part  of  the  exchanges.  A  large  amount  of 
them  is  also  brought,  chiefly  in  the  coins  of  other  coun- 
tries, which  it  is  desirable  to  convert  into  our  own,  by 
hundreds  of  thousands  of  immigrants. 

The  imports  and  exports  of  New  York  in  1874,  if  com- 
pared with  those  of  all  other  ports  of  the  United  States 
added  together,  were  almost  exactly  in  the  proportion  of 
seven  to  five,  the  precise  value  of  them  at  New  York 
having  been  $750,127,354  and  at  all  other  ports  in  the 
aggregate  $573,977,352.  This  was  no  exception  to  the 
rule.  In  1875  the  proportion  of  these  imports  and  ex- 
ports received  or  shipped  at  New  York  was  somewhat 
larger.  At  that  port  alone  they  amounted  to  $713,341,- 
549,  while  at  all  other  ports  in  this  country  they  were  of 
the  value  of  $506,092,995. 

The  difference  in  the  value  of  foreign  imports  alone  is 
yet  more  striking ;  and  as  the  Government  depends  on 
them  for  that  part  of  the  revenue  which  is  collected  in 
coin,  the  comparison  is  especially  important  and  sugges- 
tive. In  1874  the  imports  at  New  York  were  almost 
twice  as  large  as  their  aggregate  at  all  other  ports  in  the 
Union.  In  New  York  they  were  $395,133,622  and  all 
other  ports  of  the  United  States  $200,727,626.  In  1875 
the  proportions  were  nearly  the  same,  having  been  $368,- 
<>:>:, :>80  at  New  York,  and  $185,268,573  at  all  the  other 
x>rts  added  together. 

The  laws  of  the  United  States  require  that  the  duties 
m  imports  must  be  paid  in  coin.  A  far  larger  propor- 
19 


290      A    COINAGE   DEPARTMENT   IN   NEW   YORK. 

tioii  of  these  duties  is  collected  at  New  York  than  at  any 
other  port  and  than  at  all  other  ports  added  together. 
For  the  ten  years  ended  with  1875,  the  amount  of  duties 
thus  collected  at  New  York  has  been  more  than  twice  as 
targe  as  those  at  all  other  ports  of  the  Union  ;  the  aggre- 
gate at  all  the  ports,  including  New  York,  added  togeth- 
er, having  been  $1,800,650,297,  while  it  was  $1,239,615,- 
311  at  New  York  alone.  As  this  city  is  also  the  chief 
depot  and  market  on  the  Atlantic  coast  for  the  precious 
metals,  it  is  most  manifestly  inexpedient  and  unjust,  on 
grounds  of  obvious  principles  of  public  policy  and  right, 
to  refuse  to  her  the  power  of  coinage. 

As  New  York  is  the  commercial  so  also  is  she  the  mo- 
netary centre  of  the  Union.  The  capital  employed  in 
banking  in  the  State  is  more  than  twice  as  large  as  that  of 
any  other  State  except  Massachusetts.  The  average  ex- 
changes of  the  clearing  house  in  the  city  every  day  on 
the  average  of  the  last  twenty-three  years  were  over  sixty- 
one  millions,  and  for  the  last  ten  years  were  nearly  ninety- 
four  millions. 

These  enormous  commercial  and  monetary  transactions 
do  not  redound  to  the  benefit  of  the  city  of  New  York 
.alone.  They  only  exhibit,  in  a  conspicuous  form,  the  busi- 
ness the  people  of  the  whole  country  finds  it  for  their  in- 
terest to  transact  at  that  port  on  more  profitable  terms 
than  elsewhere,  and  would  have  removed  long  ago  if  they 
had  not  continually  found  this  to  be  true.  The  whole  is 
a  question  of  superior  natural  advantages,  together  with 
the  skill,  enterprise,  and  industry,  which  have  been  used 
in  developing  them  for  the  common  advantage  of  the  peo- 
ple of  the  Union.  Hence  it  follows  that  if  New  York  be 
refused  equal  facilities  with  other  cities  for  coinage  and 
recoinage,  the  unjust  disadvantages  under  which  she  is 
compelled  to  labor  are  inflicted  not  upon  her  alone,  but 
upon  all  parts  of  the  Union  with  which  it  has  commercial 
dealings. 

On  the  10th  of  October,  1854,  an  assay  office  was 
established  in  New  York.  From  that  time  to  June  30, 
1876,  gold  and  silver  to  the  value  of  no  less  than  $343,- 
5;*3,911  had  been  deposited  there.  Of  this  amount 
$253,757,757  were  prepared  as  bars  of  fine  gold  and  silver 


A   COINAGE   DEPARTMENT   IN   NEW  YORK.      291 

by  the  melter  and  refiner.  Leaving  out  of  consideration 
the  three  mints  at  San  Francisco,  Carson,  and  Denver, 
which  are  to  be  judged  by  a  different  standard,  as  they 
depend  on  the  production  of  the  precious  metals  in  the 
mountains  between  the  great  plains  of  the  continent  and 
the  Pacific  Ocean,  nearly  all  the  bars  manufactured  at 
the  mints  and  assay  offices  of  the  United  States  in 
1875-71)  were  manufactured  in  New  York.  In  1875,  at 
Philadelphia,  they  amounted  to  $318,786.66,  in  Charlotte 
to  .03,  and 'in  Boise  to  $7,779.48 — altogether  $443,- 

250.17,  or  considerably  less  than  a  twentieth  part  of  their 
amount  at  the  New  York  Assay  Office,  where  it  was  nearly 
ten  millions  ($9,925,727.28).  In  1876  the  disparity  was 

iyet  more  striking;  the  total  value  of  the  bars  of  gold 
and  silver  made  and  issued  at  the  mint  of  Philadelphia 
and  the  assay  offices  of  New  York  and  Boise  having  been 
$8,791,591,  of  which  not  far  from  nine  millions  ($8,602,- 
991)  were  made  and  issued  at  New  York,  and  less  than 
two  hundred  thousand  ($188,599)  at  Philadelphia  and 
Bois6  added  together.  More  decisive  proofs  of  the 
natural  tendencies  to  bring  the  precious  *netals  to  New 
York,  rather  than  to  any  other  city  east  of  the  great 
plains,  can  scarcely  be  imagined.  Doubtless  the  propor- 
tion of  gold  and  silver  brought  to  New  York  would  be 
vastly  increased  if  facilities  existed  there  for  their  coin- 
a^e.  If  any  manufacturing  firm  sent  its  goods  hundreds 
of  miles  for  the  sole  purpose  of  receiving  a  stamp  or 
label  which  might  as  well  be  conferred  at  home,  it  would 
be  a  fair  way  to  ruin  ;•  and  the  only  reasons  why  the 
pernicious  >\  -tern  is  permitted  so  long  to  exist  are  the 
force  of  habit,  the  difficulty  of  reform,  and  the  fact  that 
the  loss  is  borne  by  many  and  in  the  end  is  paid  out  of 
the  pockets  of  the  people  at  large. 

This  shameful  maladministration  of  public  affairs  be- 
comes yet  more  apparent  when  it  is  known  that  the 
desired  change  might,  so  far  as  the  buildings  are  con- 
eerned,  be  made  with  little  cost  or  none  at  all  to  the 
national  Treasury.  The  Director  of  the  Mint  and  the 
Supervising  Architect,  after  conferring  together,  unite  in 
the  opinion  that  there  is  a  necessity  for  the  speedy  erection 
of  a  more  suitable  building  for  the  purposes  of  the  Assay 


292      A   COINAGE   DEPARTMENT   IN  NEW  YORK. 

Office  in  New  York.  They  concur  in  saying  that  a  less 
central  location  than  the  one  now  occupied  would  be 
equally  adapted  for  the  proper  transaction  of  the  work 
which  is  carried  on  in  refining  the  precious  metals,  and 
that  the  injury  to  surrounding  property  through  the  action 
of  the  acid  fumes  resulting  from  the  processes  employed 
is  so  detrimental  that  it  should  have  weight  with  the 
Government  in  its  selection  of  a  proper  site  for  these 
works.  The  iron- work  of  the  building  is  so  far  injured 
and  weakened  that,  although  efforts  have  been  made  to 
render  it  as  secure  as  possible,  it  is  yet  in  a  dangerous 
condition. 

The  Director  of  the  Mint  and  the  Supervising  Architect 
state  positively  that  a  new  building,  located  in  a  less 
central  position,  should  be  commenced  at  once,  so  con- 
structed as  to  be  proof  against  burglars  and  fire,  and  that 
the  part  of  the  building  particularly  devoted  to  the 
reduction  should  be  built  of  such  materials  as  will  suffer 
no  deterioration  from  the  processes  employed.  They  add 
that  on  the  completion  of  the  new  edifice  the  old  building 
and  site  will  realize  by  sale  a  sum  more  than  sufficient  to 
defray  the  expenses  of  the  purchase  of  the  new  site  and 
erecting  thereon  a  suitable  structure. 

In  these  statements  I  emphatically  concur,  and  from 
my  own  local  information  and  knowledge  I  have  no  doubt 
that  the  surplus  thus  accruing  to  the  Government  would 
be  amply  sufficient  not  only  to  erect  and  complete  an 
assay  office  of  durable  materials  and  sufficiently  capacious, 
as  the  present  building  is  not,  for  the  processes  now  con- 
ducted in  it,  but  also  to  provide  the  room  and  outfit 
necessary  for  coinage.  Thus,  without  charge  to  the 
national  Treasury,  arrangements  might  be  made  for  giving 
the  people  of  the  country  ample  facilities  for  coinage  at 
that  port  where  they  would  be  incomparably  more  con- 
ducive to  the  national  welfare  than  they  can  be  at  any 
other  place  on  this  side  of  the  continent.  The  change  is 
imperatively  demanded  on  grounds  of  economy. 


THE  QUESTIONS  OF  THE  TIMES. 


AT  A  MEETING  RATIFYING  THE  NOMINATION  OP  THE  HON.  ELIJAH  WARD  FOB 
ELECTION  TO  THE  FORTY-FIFTH  CONGRESS,  November  4,  1876. 


The  following  speech  is  a  brief  review  of  the  national  neces- 
sities of  the  times.  In  it  Mr.  Ward  urged  the  pressing  necessity 
of  integrity  in  practical  politics,  economy  in  public  affairs,  re- 
duction of  taxation,  a  safe  and  gradual  return  to  specie  pay- 
ments, a  revenue  tariff  to  revive  manufactures  and  replenish 
the  Treasury,  the  extension  of  markets  for  the  products  of  our 
industry,  and  the  beneficial  restoration  of  concord  in  the  South 
through  fair  dealing  and  constitutional  liberty. 

FELLOW  CITIZENS  :  At  the  present  time  it  is  of  the 
highest  importance  that  correct  views  and  principles 
should  be  placed  before  the  people,  thus  contributing  to 
the  progress  of  sound  opinion. 

The  chief  of  all  the  changes  demanding  public  atten- 
tion is  integrity  in  public  affairs.  An  administration  re- 
garding freedom  of  government  as  the  right  of  each 
member  to  scramble  for  emoluments  and  honors  for  him- 
self and  party,  instead  of  rendering  faithful  service  to 
the  country,  has  long  held  almost  plenary  possession  of 
power.  This  is  the  most  prolific  source  of  all  the  na- 

[tional  troubles.  Reform  in  this  respect  is  the  course  on 
which  the  people  most  strenuously  insist.  Every  other 
question  should  be  subordinated  to  this  single  one,  which 
has  now  long  and  loudly  demanded  settlement.  The 
great  obstacle  to  the  fulfillment  of  the  patriotic  purposes 
of  the  people  is  the  old  plan  of  dividing  those  who  im-an 
well.  If  those  who  think  alike  will  vote  alike,  their 
cause  is  safe.  Integrity  and  fair  dealing  are  so  intimate- 
ly blended  with  other  sound  principles  in  practical  poli- 
tics, that  when  this  vantage-ground  is  gained  there  will 


294  THE   QUESTIONS   OF   THE   TIMES. 

be  less  disagreement  than  may  be  commonly  expected  on 
the  other  leading  topics  of  the  times. 

The  essential  truth  that  "  honesty  is  the  best  policy," 
has  long  been  laid  aside  with  many  forgotten  errors,  and 
its  practical  application  is  alike  the  great  need  of  the 
times  and  demand  of  the  people.  Through  it  only  is  the 
way  to  economy,  diminished  taxation,  and  renewed  confi- 
dence and  prosperity.  Without  it  there  can  be  no  reli- 
able reform,  and  the  people  will  continue  to  be  wronged 
either  by  commending  evil  doctrines,  or  by  intrigues  rob- 
bing sound  principles  of  their  proper  effect.  Integrity 
in  those  who  make  our  laws  and  manage  public  affairs  is 
as  needful  to  the  well-being  of  the  people  as  a  firm  foot- 
ing and  a  pure  atmosphere  are  to  the  progress  and  life  of 
individuals. 

The  remedy  is  in  the  hands  of  the  people.  They  can 
insist  that  merit — integrity  and  ability — not  merely  zeal 
in  political  intrigues,  shall  be  the  qualification  for  all  ap- 
pointment and  elections  to  office  and  retention  in  them. 
No  laws  or  constitution,  however  admirable,  can  secure 
the  public  interests  if  our  citizens  themselves  become  in- 
different or  inactive  in  public  affairs. 

We  have  reached  a  period  when  the  attention  of  the 
nation  is  strenuously  directed  towards  the  reformation  of 
the  abuses  which  have  attained  unprecedented  propor- 
tions under  the  management  of  the  Republicans.  As 
the  people  are  now  compelled  to  practice  economy  them- 
selves, they  expect  that  those  to  whom  the  administra- 
tion of  their  Government  is  entrusted  will  conform  to  the 
same  standard.  Recent  investigations  show  that  from 
Washington  and  the  District  of  Columbia  to  the  furthest 
of  the  wild  Indian  tribes,  the  management  of  the  party 
in  power  is  permeated  by  extravagance  and  corruption. 
Exposures  are  sometimes  made,  and  leading  Republicans 
do  not  hesitate  to  admit  that  reforms  in  almost  every 
department  of  the  Government  are  indispensable.  Yet, 
when  particular  party-doings  are  reached,  the  party 
which  is  responsible  for  them  first  opposes  those  who 
make  the  charges,  and  when  they  can  be  no  longer  re- 
sisted, screens  the  offenders  from  deserved  punishment, 
while  it  makes  a  merit  of  permitting  any  exposures  of 


THE   QUESTIONS   OF   THE   TIMES.  295 

its  own  crimes.  Credible  assertions  are  made  that  the 
United  States  are  defrauded  of  at  least  one-fourth  of  their 
rightful  revenue,  through  the  misconduct  of  the  officials 
intrusted  with  its  collection.  Incalculably  greater  in- 
jury is  inflicted  on  the  people  by  the  preventive  evils  in 
legislation  and  other  forms. 

Since  tin*  Republican  party  has  been  in  power,  it  has 
given  to  corporations  and  monopolies  an  area  of  the  pub- 
lic land  exceeding,  by  nearly  forty  thousand  square  miles, 
that  of  the  dimensions  of  no  less  than  thirteen  of  the 
most  important  States  of  the  Union,  including  the  exten- 
sive States  of  New  York,  Pennsylvania,  Ohio,  and  Indi- 
ana. The  extent  to  which  other  abuses  have  been  carried 
can  never  be  known,  unless  there  is  a  change  in  the  per-  • 
sonnel  of  the  Administration.  Persevering  investigation 
has  been  made  by  a  Democratic  Congress  during  the  last 
session,  but  further  inquiries  are  absolutely  necessary, 
not  only  to  arrest  the  present  wrongs,  but  as  the  best 
means  of  discovering  the  proper  measures  for  lasting  re- 
form and  improvement. 

The  masses  of  the  people  everywhere  are  anxious  for  a 
return  to  the  sound  principles  on  which  our  Government 
is  founded.  Enormous  wrongs,  it  is  universally  admitted, 
have  been  perpetrated  under  the  Republican  Administra- 
tion. The  practical  question  at  the  approaching  election 
is,  whether  leaders  of  the  party  which  has  committed  them 
should  be  trusted  and  retained  in  positions  of  the  highest 
responsibility  and  confidence.  To  this  there  can  be  only 
<>ne  reasonable  answer.  After  we  have  repeatedly  seen 
those  who  are  in  power  attempt  to  screen  offenders  and 
thwart  the  efforts  of  Democrats  to  expose  them  until  the 
exposures  became  too  rank  and  flagrant  to  be  any  longer 
suppressed,  further  confidence  is  absolutely  repugnant  to 
common  sense,  the  principles  of  which  are  the  same  in 
affairs  of  Stair  and  ordinary  life. 

Four  years  ago,  in  the  national  platform  of  the  Re- 
publicans their  party  pledged  itself  to  the  enactment  of 
laws  which  would  i-  make  honesty,  efficiency,  and  fidelity 
the  essential  qualifications  for  office."  But  such  expo- 
sures have  throughout  that  period  been  madr  and  will 
probably  continue  to  be  made,  as  incalculably  exceed 


296  THE   QUESTIONS   OF   THE   TIMES. 

those  which  at  any  previous  time  would  have  irretrieva- 
bly condemned  any  Administration  or  party.  They 
give  us  startling  glimpses  of  the  evils  which  leaven  the 
whole  system.  The  Republican  Congress  not  only 
abandon  the  effort  to  reform,  and  in  spite  of  frequent 
pledges  of  economy,  the  ordinary  expenditures  of  the 
Administration  in  1874  far  exceeded  those  of  any  year 
since  1888.  The  same  Congress  voted  for  $40,000,000 
of  additional  taxes,  a  sum  which  alone  is  two-thirds  of 
the  whole  cost  of  the  Government  of  the  United  States, 
in  its  last  year  of  Democratic  rule.  In  1875,  notwith- 
standing the  urgent  necessity  of  economy,  the  net  ordi- 
nary expenditures  were  almost  exactly  the  same  as  the 
average  of  the  five  previous  years.  Under  the  present 
Administration  the  number  of  employees  in  the  civil  ser- 
vice, has  been  needlessly  almost  doubled,  having  in- 
creased from  fifty-four  thousand  in  1869,  to  one  hundred 
and  two  thousand  in  1876. 

Eleven  years  ago,  and  repeatedly  since  that  time,  the 
Republican  party  proclaimed  that  a  return  to  specie 
payments  was  one  of  its  cardinal  principles,  and  yet  we 
are  now  further  from  it,  and  the  greenback  is  more 
depreciated  than  it  was  six-  years  ago.  The  party  has 
practically  persevered  in  the  fictions  by  which  it  im- 
periled the  credit  of  the  nation  and  impoverished  the 
people.  Nothing  has  been  done  to  promote  commerce, 
restore  the  American  flag  to  its  former  proud  position 
on  the  ocean,  revive  manufactures,  or  relieve  all  classes, 
and  replenish  the  Treasury  by  means  of  a  revenue  tariff. 

The  prosperity  of  the  city  of  New  York  depends  in  no 
inconsiderable  degree  upon  her  shipping  trade  with  for- 
eign countries.  In  this  respect  our  interests  have  been 
greatly  neglected  by  the  party  in  office.  When  it  came 
into  power,  nearly  all  our  commercial  transactions  with 
other  nations  were  carried  on  through  our  own  vessels. 
The  proportions  are  now  reversed,  and  now  only  a  small 
fractional  proportion  of  our  foreign  carrying  trade  is  under 
our  own  flag.  Enormous  sums  are  annually  paid  to  foreign- 
ers for  freight  and  passage  money,  which,  under  a  judi- 
cious system  of  tariff,  would  accrue  to  the  profits  of  our 
own  people.  Upon  the  same  principles,  applied  to  other 


THE   QUESTIONS   OF   THE   TIMES.  297 

articles,  much  encouragement  would  be  given  to  the 
cheaper  production  of  many  manufactures  we  shouLl  be 
enabled  to  export  in  greater  quantities,  thus  giving  in- 
creased employment  to  large  numbers  of  our  people,  and 
furnishing  an  enlarged  market  at  home  for  the  produc- 

O  •"*)  A 

tions  of  the  field  and  workshop. 

In  striking  contrast  with  the  long-continued  extrava- 
gance of  those  in  power  is  the  course  pursued  by  the 
Democratic  party  in  the  House  of  Representatives  last 
session,  when,  for  the  only  time  in  many  years,  it  obtain- 
ed a  majority.  It  was  at  first  fettered  by  a  rule  estab- 
lished by  the  Republicans,  that  no  law  as  to  appropria- 
tions, upon  an  appropriation  bill,  should  be  repealed  or 
even  modified,  unless  it  had  the  assent  of  two-thirds  of 
the  members.  Wise  efforts  in  favor  of  economy  encoun- 
tered the  bitter  and  persevering  efforts  of  the  Republican 
Senate.  Yet  against  all  the  obstacles  placed  in  its  way 
the  Democrats  effected  a  reduction  within  a  fraction  of 

k  $30,000,000  from  the  appropriations  of  the  previous  year 
by  the  Republicans.  This  is  an  annual  relief  of  over  a 
hundred  thousand  dollars  from  the  burden  of  the  tax- 
payers in  each  Congressional  district  throughout  the 
country,  and  nearly  three  millions  and  a  half  to  the  State 
of  New  York.  It  is  over  fifty -five  millions  less  than  the 
amount  asked  by  the  Administration,  and  yet  ten  millions 

Pinoiv  than  it  would  have  been  but  for  the  opposition  of 
the  Republican  Senate.  In  the  State  of  New  York,  un- 
der Democratic  rule,  taxation  for  the  present  year 
has  been  reduced  nearly  eight  millions  of  dollars,  as  com- 
pared with  1874,  and  the  saving  to  the  county  of  New 
JVork  alone  is  nearly  four  millions. 
The  oppression  of  the  Southern  people  by  the  party  in 
power  invites  the  most  serious  consideration  at  the  pres- 
ent time.  My  views  are  those  expressed  by  President 
Grant  when,  before  he  was-  trammelled  by  partisan  con- 
siderations and  after  careful  inspection  of  the  Southern 
State-,  lie  expressed  satisfaction  that  "  the  mass  of  the 
Southern  people  accepted  the  situation  of  affairs  in  good 
faith:"  that  t  he  questions  which  formerly  divided  the  sen- 
timents of  the  people  of  the  two  sections  are  regarded  by 
the  South  as  forever  settled  by  the  highest  tribunal ;  and 


298  THE   QUESTIONS   OF   THE   TIMES. 

that  "  immediately  after  the  close  of  the  rebellion  there 
was  a  very  fine  feeling  manifested  in  the  South,  and  that 
we  ought  to  take  advantage  of  it  as  soon  as  possible." 
Instead  of  taking  this,  the  only  right  course  and  the  only 
course  in  accordance  with  the  interests  of  the  people  of 
the  North,  the  national  Government  has  been  wrongfully 
represented  in  the  South  by  corrupt  men. 

The  most  serious  results  must  follow  to  the  people  of 
the  whole  Union,  if,  under  an  usurped  power,  the  con- 
tinuation of  military  interference  and  despotism  such  as 
have  been  Conspicuously  exemplified  in  South  Carolina 
and  Louisiana,  and  now  existing,  should  be  permitted. 
The  beneficial  restoration  of  concord  and  the  Union  can 
only  be  effected  by  fair  dealing  and  constitutional  liberty. 

If  we  consider  the  importance  of  the  welfare  of  the 
Southern  States  with  a  view  simply  to  our  own  interests, 
we  cannot  fail  to  see  how  greatly  the  prosperity  of  our 
merchants  and  lawyers  depend  upon  theirs.  Their  exports 
for  the  last  five  years  were  almost  twice  as  large  as  all 
the  interest  on  the  national  debt  during  the  same  time, 
and  were,  at  least,  equal  in  amount  to  three-fourths  of  the 
exports  of  the  North.  Thus  we  see  at  a  glance  how  deep- 
ly we  are  concerned  in  the  welfare  both  as  furnishing* 
means  for  paying  the  national  debt,  and  as  a  market  on 
which  the  profits  of  our  merchants  and  the  employment 
of  our  people  so  greatly  depend. 

However  great  the  financial  blunders  through  which 
the  national  debt  is  now  far  larger  than  it  ought  to  have 
been,  the  money  advanced  was  paid  in  good  faith,  based 
on  the  promises  of  the  nation;  and  its  honor  and  credit 
require  that  both  interest  and  principal  shall  be  paid  in 
coin.  The  people,  without  regard  to  party,  united  with 
great  promptitude  and  bravery  in  the  preservation  of  the 
Union,  and  submitted  to  the  most  exorbitant  taxation  and 
exactions  without  a  murmur.  When  the  war  was  over, 
it  was  generally  expected  that  heavy  taxation  would 
cease ;  but,  instead  of  this,  the  burdens  have  continued, 
and  seven  hundred  millions  of  direct  and  indirect  taxes, 
besides  the  needlessly  extravagant  and  profligate  cost  of 
collecting  them,  have  been  taken  from  the  people,  although 
that  payment  could  well  have  been  deferred  until  the 


THE   QUESTIONS   OF   THE   TIMES.  299 


financial  condition  of  the  country  would  better  have 
enabled  our  citizens  to  meet  it.  The  deter  mi  nation  of  the 
people  to  pay  the  debt,  the  known  magnitude  of  our 
resources,  and  the  rapidity  of  their  development,  are  such, 
that  after  the  resumption  of  specie  payment  its  gradual 
reduction  may  be  anticipated. 

The  approach  to  specie  payments  should  be  by  such  pru- 
dent measures  as  will  leave  no  cause  for  reaction,  and  inter- 
fere as  little  as  possible  with  the  relations  of  debtors  and 
creditors,  giving  individuals  ample  time  to  prepare  for  a 
new  condition  of  affairs.  The  Republican  party,  while 
professing  to  be  in  favor  of  a  return  to  a  sound  currency, 
has  constantly  evaded  it  in  practice.  In  the  Forty-third 
Congress  it  repealed  the  delusive  pledges  it  had  previously 
made,  by  announcing  that,  in  four  years,  specie  payments 
should  be  renewed,  but  up  to  the  present  time  has  accom- 
panied the  resolution  by  no  act  to  render  it  effective. 

On  every  point  the  Administration  and  leaders  of  the 
Republican  party  have  amply  proved  that  however 
specious  their  promises  may  be,  no  confidence  can  be 
placed  in  them,  and  at  the  last  Congressional  election  the 
people,  by  an  overwhelming  vote  and  by  a  common  im- 
pulse throughout  the  Union,  recorded  an  emphatic  verdict 
of  condemnation.  It  is  only  to  the  Democratic  party  that 
we  can  look  with  expectation  of  reform.  We  need  a 
restoration  of  cordial  harmony  between  the  North  and  the 
South,  and  conciliation  of  the  races.  Can  we  have  any 
hope  of  these  benefits  from  the  party  which  has  fostered 
discord  and  ivlies  upon  it  for  a  continuation  of  these 
things  which  it  most  desires  ?  Are  we  to  expect  a  purer 
Li-overiiment  from  the  party  which,  for  the  benefit  of  its 
own  members,  has  doubled  the  number  of  its  office-holders 
at  a  time  when  the  work  to  be  done  was  diminished  ? 
After  the  stupendous  financial  blunders  now  acknowledged 
by  leading  Republicans,  and  which  probably  doubled  the 
oosi  <>f  the  war,  are  we  to  look  to  the  same  party  for 
extrication  from  difficulties  into  which  it  has  plunged  us ? 
Can  we  expect  from  it  sincere  investigation  into  its  own 
wrongdoings,  or  fair  treatment  of  charges  against  its 
own  members  from  exposure  of  which  guilt  it  would 
suffer  ?  It  would  be  unreasonable  to  trust  for  such  a  re- 


300  THE   QUESTIONS   OF   THE  TIMES. 

duction  of  taxation,  for  such  revenue  reform,  and  extension 
of  markets  as  are  needed,  for  the  products  of  our  industry 
to  the  party  which  has  already,  by  its  anti-commercial 
policy,  brought  embarrassment  and  ruin  upon  so  large  a 
portion  of  the  mercantile  and  laboring  population.  Un- 
der these  considerations,  it  is  clear  that  the  mission  of  the 
Republicans  has  ended,  and  that  a  new  party  should  take 
possession  of  the  reins  of  power,  and  revive  those  inter- 
ests which  are  so  important  to  the  people  at  large. 

No  matter  how  well  meaning  the  Presidential  candidate 
of  the  Republicans  may  be,  it  would  be  impossible  for 
him  to  be  an  effective  supporter  of  reform  and  entrench- 
ment. He  would,  from  the  moment  of  his  election,  be 
surrounded  by  those  who,  with  their  adherents,  including 
over  a  hundred  thousand  office-holders,  constitute  the 
present  Republican  party  and  profit  by  the  taxes  wrung 
from  the  hard  earnings  of  the  people.  They  would  be 
the  power  behind  his  office,  and  he  would  become  a  tool  in 
their  hands.  On  the  contrary,  a  Democratic  President, 
with  a  Democratic  Cabinet,  fresh  from  the  people,  and 
representing  their  principles  and  wishes,  would,  from  the 
absolute  necessity  of  their  position,  be  compelled  to  en- 
force measures  of  economy  and  integrity,  and  reform  the 
abuses  against  which  they  protest,  which  have  been  created 
by  the  Republicans,  and  for  which  they  are  responsible. 

It  is  not  only  the  success  of  the  Democratic  candidate 
for  the  Presidency  that  is  important  to  the  people.  It  is 
essential  to  the  restoration  of  national  prosperity  that 
the  Democratic  party  should  retain  its  preponderance  in 
the  House  of  Representatives.  My  record  as  a  member 
of  that  House  for  the  four  terms  during  which  you  have 
honored  me  with  your  confidence,  is  open  to  you  all,  and 
well  known  to  nearly  all  who  are  before  me.  I  have  al- 
ways regarded  it  as  of  the  first  importance  that  Congress 
should  steadily  indicate  a  rigid  determination  to  restore 
the  currency  to  a  sound  basis  at  the  earliest  term  consist- 
ent with  the  business  interests  of  the  country ;  that  the 
paper  dollar  may  be  convertible  into  coin  at  the  option 
of  the  owner,  and  be  as  valuable  as  a  dollar  in  gold.  By 
adherence  to  this  course,  business  would  gradually  adapt 
itself  to  the  new  basis  without  injury  to  the  business 


THE   QUESTIONS   OF   THE   TIMES.  301 

nterests  of  the  country.  Confidence  would  return,  and, 
•vith  it,  prosperity  would  prevail.  My  vote  has  ahvays 

x'cii  in  tav<  >r<>t'  such  measures  as  will  promote  harmony 
in  the  Southern  States,  and  make  the  Union,  with  its 

ittendant  benefits,  a  union  more  and  more  fully  in  spirit 
and  in  substance.  I  have  endeavored  to  promote  such  a 
reform  and  simplification  of  the  tariff  as  will  restore  our 
tonnage,  stimulate  manufactures,  and  extend  our  com- 
merce, while  it  will  at  once  increase  the  revenue  and 
lighten  the  burden  of  taxation.  I  have  especially  labored 
for  the  establishment  of  such  an  extension  of  our  com- 
mercial relations  with  adjacent  countries  as  could  not  fail 
to  be  mutually  beneficial  to  all  parties  interested  in  them. 
My  views  on  these  and  other  subjects  are  already  familiar 
to  many  who  are  now  present,  and  if  again  returned  to 
Congress,  you  shall  find  me  in  the  future,  as  I  have  been 
in  the  past,  an  earnest  and  consistent  supporter  of  your 
interests,  and  of  those  principles  and  measures  which 
conduce  most  to  the  welfare  of  our  country. 


A  FREE   CANAL  POLICY: 

THE   BEST   GUARANTEE  FOR   THE  PRESERVATION  AND 
INCREASE   OF   OUR   INLAND    COMMERCE. 

At  a  meeting  of  the  members  of  the  Chamber  of  Commerce, 
New  York  Produce  Exchange,  Ship-owners'  Association,  and 
Citizens'  Association,  held  in  the  city  of  New  York,  March  9, 

1870. 

ME.  CHAIEMATT  :  I  do  not  intend  to  enter  into  the  de- 
tails of  the  great  subject  before  us,  but  briefly  to  indicate 
my  concurrence  with  those  who  wish  to  carry  to  success- 
ful completion  the  early  policy  of  the  founders  of  the 
Erie  Canal,  and  thus  aid  in  further  developing  the  numer- 
ous agricultural,  manufacturing,  and  commercial  interests 
of  our  country. 

I  need  not  remind  the  audience  before  me  that  the 
existence  of  the  metropolitan  city  where  we  live  is  owing 
to  its  superb  position  at  the  mouth  of  the  Hudson  River, 
its  admirable  harbor,  and  to  the  extension  of  navigation 
to  the  Great  Lakes.  Railroads — those  marvellous  crea- 
tions of  less  than  half  a  century — cover  our  country  with 
a  network,  and  lead  from  the  Northwest  to  many  cities 
on  the  Atlantic  Coast;  but,  of  all  the  sisterhood  of 
United  States,  New  York  alone  possesses  a  good  water 
route  from  the  lakes  and  the  great  granary  of  the  interior 
to  the  ocean.  With  proper  care  of  it  and  its  connections, 
this  public  work  will  render  benefits  to  our  race  greater 
than  those  of  the  far-famed  Canal  of  Suez,  for  it  will 
bind  to  the  Atlantic  coast  and  to  this  city,  which,  though 
already  great,  is  yet  in  its  infancy,  the  vast  and  now 
sparsely  inhabited  Northwest,  where,  within  the  life-time 
of  some  who  now  live,  many  additional  millions  of  the 
most  energetic  and  industrious  of  the  human  race  will 
dwell,  and,  aided  by  all  the  labor-saving  appliances  of 
present  and  future  inventions,  pour  forth  their  invaluable 


A   FREE   CANAL   POLICY.  303 

productions  to  swell,  beyond  all  our  minds  can  now  be- 
lieve or  imagine,  the  volume  of  their  trade  with  New 
York,  and  of  that  commerce  with  the  Western  nations 
of  Europe  and  other  countries,  of  which  this  city  is 
marked  out  by  nature  as  the  proper  depot. 

During  my  recent  travels  in  the  Old  World,  the  former 
and  present  sites  of  its  commerce  naturally  drew  my  at- 
tention, and  brought  vividly  before  me  the  causes  of  their 
rise  and  fall.  I  found  everywhere  that,  although  rail- 
roads are  preferred  as  the  means  of  carrying  passengers, 
and  transact  an  enormous  and  increasing  business  in 
freight,  the  canals  and  natural  water-courses  compete  suc- 
cessfully with  them  in  the  carrying  of  heavy  and  bulky 
articles,  such  as  form  almost  exclusively  the  mass  of  the 
exports  from  the  West  to  the  Atlantic. 

In  the  investigations  I  made  in  1858  as  to  the  proposed 
ship-canal  between  the  Atlantic  and  Pacific  Oceans,  I 
found  it  was  calculated  by  competent  engineers  that  the 
of  the  transportation  of  a  ship  and  cargo  of  one 
thousand  tons  by  such  a  canal  would  probably  be  less 
than  one-twenty-nfth  part  of  the  cost  of  transporting  the 
car--o  by  rail.  The  same  ratio  will  not  hold  good  as  to 
transit  by  canal  and  by  rail  between  New  York  and  the 
Lakes,  but,  during  those  months  when  water  communica- 
tion is  annually  open,  the  experience  of  our  State  and 
other  parts  of  the  world  demonstrates  that  it  furnishes 
the  cheapest  mode  of  transmitting  all  the  commodities 
which  are  of  great  weight  and  bulk  in  proportion  to 
their  value,  and  for  which  swiftness  of  movement,  at 
additional  expense,  is  not  desired. 

I  have  found,  with  much  regret,  that  while  the  popula- 
tion of  the  United  States  is  steadily  increasing  at  the 
rate  of  about  three  and  one-half  per  cent,  yearly,  and 
the  chief  productions  of  the  Western  grain-- rowing 
~tates  are  increasing  in  a  grater  ratio,  thereon* lit  ion  of 
our  canals  and  the  tolls  demanded  on  articles  passing 
through  it  have  been  and  an-  such  that  the  trade  of  New 
York  in  wheat  and  breadstuffs,  the  chief  staple  of 
Northern  exports,  U  stationary.  It  is  also  an  alarming 
fact,  and  one  that  should  be  known  to  every  voter  in  the 
State  of  New  York,  for  it  rests  on  the  authority  of  the 


W 

SI 


304  A   FREE   CA^AL   POLICY. 

State  Engineer  himself,  that  although  the  productions 
naturally  seeking  transit  through  the  canal  have  long  con- 
tinued to  increase,  that  important  public  work  itself  has 
been  so  unjustifiably  neglected  that  its  capacity  to  carry 
has  actually  been  diminished.  In  the  estimate  I  have 
made  as  to  the  Western  productions  brought  to  this  city, 
I  include  all  that  is  brought  by  rail. 

Viewing  the  subject  superficially,  it  may  seem  that  a 
rivalry  injurious  to  the  railroads  of  our  State  might  be 
created  by  an  enlarged  canal ;  but  it  is  not  difficult  to 
appreciate  the  essential  harmony  of  the  interest  of  the 
two  systems,  when  we  reflect  on  the  amount  of  Western 
productions  already  going  and  likely  in  increased  quanti- 
ties to  go  elsewhere,  but  which,  through  the  attraction  of 
cheaper  and  quicker  transportation  on  the  canal,  would 
be  brought  by  lake  vessels  to  the  chief  termini  of  our 
largest  roads.  During  six  months  of  every  year  the 
railroads  would  have  a  monopoly  in  carrying  heavy  and 
bulky  articles,  as  they  would  have  throughout  the  whole 
year,  in  the  additional  passengers  and  light  goods  brought 
to  them  by  the  certain  advance  in  the  general  prosperity. 

A  brief  consideration  of  the  physical  features  of  the 
country  whence  our  inland  commerce  is  derived,  and  on 
which  also  our  imports  chiefly  depend,  will  enable  us  to 
appreciate  the  subject  in  its  true  relations.  The  great 
mountain  ranges  of  the  North  American  continent  are  in 
two  chains,  one  being  far  to  the  West,  and  known  as  the 
Rocky  Mountains,  and  running  parallel  to  the  Pacific 
from  near  the  Arctic  Ocean  to  the  Isthmus,  and  the  other 
known  as  the  Appalachian  or  Alleghany  Mountains  in 
the  East,  and  running  parallel  to  the  Atlantic  coast. 
The  latter  range  reaches  from  Georgia  to  the  Catskill 
Mountains,  where,  through  an  opening  made  when  the 
mountains  were  formed,  and  increased  by  attrition,  the 
Hudson  flows,  and  affords  to  commerce  the  facilities 
which,  in  connection  with  our  almost  unrivalled  harbor, 
and  the  low  level  of  the  land  of  this  State  between  that 
river  and  Lakes  Ontario  and  Erie,  gave  to  New  York  its 
trade  and  commerce. 

The  political  and  commercial  importance  of  the  region 
thus  described  has  been  duly  estimated  by  the  thought- 


A  FREE   CANAL  POLICY.  305 

fill  men  of  this  continent  ever  since  its  formation  wag 
understood.  The  attention  of  Washington  was  given  to 
the  subject  as  soon  as  he  attained  majority,  and,  with 
a  view  to  developing  its  advantages  by  opening  an  ade- 
quate water-course,  he  followed  the  Mohawk  until  he 
reached  the  summit  separating  the  streams  which  flow 
into  Lake  Ontario  and  the  St.  Lawrence  from  those  flow- 
ing into  the  Hudson,  and,  with  the  foresight  of  a  true 
statesman,  declared  that  through  the  depression  he  thus 
examined  would  be  the  chief  thoroughfare  of  the  com- 
merce of  the  interior  with  the  Atlantic  coast  and  the 
nations  on  the  other  side  of  the  ocean. 

On  the  eastern  side  of  the  river  the  mountains  resume 
their  course,  and,  under  various  names,  continue  to  the 
northern  extremity  of  Gaspe,  preventing  the  St.  Law- 
rence from  flowing  southward,  and  driving  the  waters 
from  the  Great  Lakes  so  far  to  the  north,  that  exit  and 
entrance  for  vessels  by  way  of  Montreal  and  Quebec  are 
impossible  for  half  the  year. 

The  vast  plain  comprised  between  the  two  great  moun- 
tain ranges  has  an  average  breadth  of  more  than  one 
thousand  four  hundred  miles,  and  arithmetical  calcula- 
tions fail  to  give  us  an  adequate  idea  of  its  area  from  the 
Gulf  of  Mexico  on  the  south  to  its  extremity  on  the 
north.  Rivers  of  large  size  flow  into  the  Arctic  Ocean, 
but  there  the  severity  of  the  climate  is  such  as  to  pre- 
vent the  formation  of  ports  accessible  to  shipping,  and 
thus  these  rivers  may  be  dismissed  from  consideration  as 
channels  of  commerce,  except  so  far  as  they  will  contrib- 
ute to  the  trade  which  will  concentrate  on  Lake  Supe- 
rior. The  remainder  of  the  natural  system  of  commer- 
cial arteries  is  of  wonderful  simplicity,  and  consists  of 
only  two  great  rivers  —  the  Mississippi  and  the  St.  Law- 
rence. 

The  Mississippi  is  navigable  for  nearly  two  thousand 
miles  from  the  Gulf  of  Mexico,  and,  but  for  the  injury 
done  to  grain  and  other  perishable  articles  by  passing 
through  a  climate  so  hot  as  that  of  New  Orleans,  this 
river  would  be  used  for  freightage  to  a  much  greater 
extent.  Its  course  leads  away  from  Europe,  but  to  ward 
the  tropical  countries  of  the  West  Indies  and  South 


306  A   FREE   CANAL   POLICY. 

America.  The  necessities  implied  by  these  facts  have 
been  so  fully  appreciated  by  the  people  of  the  Missis- 
sippi Valley,  that  they  have  already  connected  its  vast 
inland  navigation  with  the  Great  Lakes  by  four  lines  of 
canal  and  numerous  railroads,  so  as  to  obtain  an  outlet 
for  their  products  by  Atlantic  ports  instead  of  by  their 
own  river. 

Thus  the  great  course  of  the  inland  trade  of  this  con- 
tinent is  to  and  fro  between  the  East  and  the  West. 
Before  the  Erie  Canal  was  opened,  the  difficulties  of  car- 
riage between  these  two  portions  of  the  Union  were  so 
great  as  almost  to  constitute  an  embargo ;  but  no  sooner 
was  this  public  work  in  operation  than  the  cost  of  trans- 
portation from  Buffalo  to  Albany  was  reduced  from  one 
hundred  dollars  to  ten,  and  afterwards  to  three  dollars  a 
ton.  Until  the  canal  was  made,  the  productions  of  the 
West  were  of  little  commercial  value ;  there  were  few 
inducements  for  the  emigrant  to  settle  on  the  new  shores 
of  Lakes  Erie  and  Michigan,  while  the  country  beyond 
them  was  a  yet  more  unbroken  wilderness.  The  open- 
ing of  the  canal  had  an  electrical  effect  not  only  in  our 
own  country,  but  also  in  stimulating  the  immigration  of 
the  laboring  population  of  Europe;  and  the  develop- 
ment of  the  West  was  accompanied  by  a  corresponding 
increase  of  business  in  the  city  and  State  of  New  York 
and  New  England. 

In  the  meantime  the  people  on  the  northern  side  of 
our  frontier  were  not  forgetful  of  whatever  advantages 
belong  to  the  St.  Lawrence,  and,  by  a  series  of  canals 
and  lakes,  they  enabled  vessels  to  pass  around  the  rapids 
of  that  river  and  into  Lake  Ontario  from  the  ocean, 
and  also  made  another  ship  canal  from  Lake  Erie  into 
Ontario. 

So  long  as  we  adopted  a  wise  commercial  policy,  and 
also  enlarged  our  canal  from  the  Hudson  to  the  lakes  in 
due  proportion  to  the  increase  of  Western  and  Canadian 
trade,  the  route  by  the  way  of  New  York  easily  main- 
tained its  supremacy,  and  our  port,  open  at  all  seasons, 
was  secure  as  the  great  distributing  market  of  grain  and 
breadstuffs  to  the  South,  to  New  England,  and  to 
Europe.  Now,  not  only  are  we  remaining  stationary, 


A   FREE   CANAL   POLICY.  307 

the  exports  of  our  products  by  our  foreign -neighbors 
are  greatly  increasing.  The  Northwest  of  our  country 
and  of  British  America  is  likely  soon  to  enlarge  im- 
mensely its  production  of  wheat  to  an  extent  far  beyond 
the  quantity  required  for  consumption  in  the  United 
States  and  Canada.  The  densely  populated  countries 
of  Western  Europe  will  be  the  chief  market  for  this 
surplus. 

Thus  it  becomes  important  that,  while  we  know  that 
our  port  occupies  a  central  position,  and  by  its  trade 
with  Northern  and  Southern  regions,  is  the  chief  rendez- 
vous of  this  continent  for  shipping  from  all  parts  of  the 
world,  we  should  not  be  guilty  of  the  folly  of  ignoring 
the  fact  that  the  St.  Lawrence  leads  almost  in  a  direct 
line  from  the  great  grain-growing  regions  of  the  West  to 
those  nations  of  Europe  whose  people  are  and  will  be  the 
chief  consumers  of  the  grain  exported  from  the  United 
States,  and  that  the  British  and  other  foreign  vessels 
used  to  take  cargoes  from  our  other  seaports,  or  Mon- 
treal to  Europe,  will  be  likely  to  bring  back  return 
freight,  thus  doubly  injuring  our  trade. 

By  a  liberal  and  progressive  policy  as  to  the  canal,  we 
shall  not  only  arrest  the  departure  of  trade  from  us,  but 
greatly  increase  its  volume  by  restoring  the  traffic  in 
many  important  articles  which  had  been  diverted  to  some 
extent  to  other  channels,  sometimes,  of  late,  charging  less 
for  transit. 

Nature  herself  seems  to  have  intended  to  aid  man  in 
connecting  Lake  Michigan  with  the  Mississippi  River. 
So  nearly  do  the  Fox  and  Wisconsin  Rivers  meet,  that 
on  the  map  they  seem  to  be  the  same  river.  Already, 
by  the  aid  of  a  few  short  canals  and  locks,  steamboats  of 
light  (Iran-lit  pass,  during  the  period  of  high  water, 
from  "  the  Family  of  Lakes  to  the  Father  of  Waters." 
Iowa,  Minnesota,  and  Wisconsin  are  eagerly  looking  for- 
ward to  the  enlargement  of  this  channel.  Reliable  en- 
gineers who  have  investigated  the  subject  give  assurances 
that,  by  connecting  various  rivers,  communication  by 
water  can,  at  very  moderate  cost,  be  continued  into  the 
interior  of  the  continent  for  hundreds  of  miles  beyond  the 
Mississippi. 


308  A   FREE    CANAL   POLICY. 

The  first  link  in  this  vast  and  unequalled  series  of 
water  channels  is  the  canal  leading  westward  from 
Albany ;  and  that  its  enlargement  at  the  earliest  possible 
time  is  one  of  the  most  desirable  events  for  the  nation  at 
large,  and  especially  for  our  own  city  and  State,  cannot 
be  doubted  by  any  who  examine  the  subject  with  candid 
and  unbiased  minds.  The  question  arises— by  whom 
shall  it  be  done  ? 

It  is  yet  in  our  power  to  make  such  reductions  in  the 
cost  of  transportation  to  New  York  as  will  secure  this 
trade  to  us,  by  enlarging  the  canal  so  as  to  permit  the 
passage  of  large  boats,  then  introducing  the  use  of  steam 
as  a  propelling  power,  and  adopting,  to  the  fullest  extent, 
that  rule  which  is  the  best  policy  toward  ourselves  and  is 
due  from  us  to  every  other  State  of  the  Union,  and  from 
every  State  of  the  Union  to  us — the  freest  possible  tran- 
sit of  passengers  and  trade  through  our  territory.  We 
should  as  soon  as  possible  reduce  the  tolls  on  our  public 
works  to  the  minimum  cost  of  their  current  expenses, 
allowing  a  moderate  amount  annually  for  interest  on  the 
sum  expended  and  to  discharge  the  principal. 

A  ineasure  has  been  introduced  into  Congress  asking 
for  aid  to  complete  a  canal  from  Buffalo  and  Oswego  to 
tide-water,  capable  of  floating  vessels  of  six  hundred  tons 
burthen.  Apart  from  the  difficulties,  delays,  and  doubts 
which  beset  the  passage  of  such  a  measure  at  the  present 
time,  when  the  public  mind  is  looking  for \vard  to  national 
retrenchment,  the  plan  is  liable  to  most  serious  objections. 
It  is  desirable  that  we  should  keep  the  canal  entirely 
under  our  own  control  and  unfettered  by  conditions. 
At  the  time  of  the  last  census  the  population  of  the  State 
of  New  York  outnumbered  that  of  at  least  a  dozen  other 
States.  In  accumulated  capital  the  disproportion  is  yet 
more  conspicuous.  Ours  is  pre-eminently  the  commer- 
cial State,  and  is  not  only  amply  able  itself  to  do  the 
work,  but  is  especially  interested  in  maintaining  the  great 
thoroughfare  for  trade  from  the  West. 

Looking  at  the  authentic  statistics  of  the  Erie  Canal, 
apart  from  the  lateral  branches,  we  find  that  the  returns  or 
income  from  it  some  years  ago  exceeded  the  aggregate  ex- 
penditure for  its  original  cost,  the  interest,  maintenance, 


A   FREE   CANAL   POLICY.  309 


repairs,  and  all  other  items — a  ad  are  precisely  $140,430,- 
953.40,  while  the  tolls  derived  from  it  have  been  over  $87,- 
000,000,  and  the  interest  on  them  exceeds  $94,000,000 ; 
the  total  income  being  $181,828,603.83,  or  more  than  $41,- 
000,000  over  all  its  other  expenditures  from  the  beginning 
to  1867,  while  since  that  time,  a  large  addition  has  been 
annually  made  to  this  surplus. 

Taking  a  more  extensive  but  no  less  truthful  view  of 
the  rase,  the  mind  glances  at  the  farms,  manufactories, 
villages,  and  cities  it  has  created  along  and  near  its  line, 
and  the  additions  it  has  made  to  commerce,  wealth,  and 
population  at  its  terminus.  I  speak  far  within  the  boun- 
daries of  accuracy  when  I  say  that  in  its  indirect  results 
to  the  people  of  this  State  the  canal  has  been  beneficial 
to  an  extent  greater  by  very  many  times  than  all  the 
direct  revenues  or  profit  drawn  from  it.  We  are  to  esti- 
mate this  part  of  the  subject  by  the  increase  of  individ- 
ual wealth  throughout  the  community,  the  rise  in  real 
estate,  both  in  city  property  and  in  farms,  and  by  the 
multiplication  and  prosperity  of  our  people.  It  would 
not  be  difficult  to  show  that  by  opening  out  the  West  to 
settlement,  the  canal  contributed  more  than  any  other 
single  cause  to  the  preponderance'  of  the  power  of  the 
North. 

The  fifteenth  of  last  month  is  memorable  for  the  cele- 
bration of  the  beginning  of  work  on  an  undertaking  of 
stupendous  importance  to  mankind,  not  only  in  itself,  but 
as  a  forerunner  of  many  others  yet  to  be  accomplished. 
I  allude  to  the  railroad  known  as  the  Northern  Pacific, 
by  which  St.  Paul  and  the  Mississippi  will  be  connected 
with  Lake  Superior,  and  a  new  line  of  rail,  running  con- 
tin  uouslv  through  the  most  fertile  belt  of  the  Western 
half  of  this  continent,  will  be  established  from  the  great- 
est of  all  our  inland  seas  to  the  Pacific.  It  has  for  us  a 
special  significance  and  interest. 

Partly  through  difficulty  of  access,  and  partly  through 
the  machinations  of  that  "  Last  Great  Monopoly  "  — tne 
Hudson's  Bay  Company — the  public  has  only  recently 
known  that  West  and  Northwest  from  Lake  Superior  is 
a  vast  area  of  fertile  land,  much  of  it  equal  in  fertility 
to  that  of  Illinois,  while  it  surpasses  that  far-famed 


310  A    FREE   CANAL   POLICY. 

State  by  many  times  in  extent.  Acre  for  acre,  a  portion 
of  it,  equal  in  size  to  more  than  five  such  States,  will 
probably  not  be  inferior  to  Illinois  in  the  value  of  its 
productions.  It  includes  not  only  much  of  our  territory, 
but  also  the  rich  wheat  plains  of  the  Red  River  of  the 
North,  and  those  of  the  yet  greater  Valley  of  the  Sas- 
katchewan, well  named  the  Mississippi  of  the  North, 
which  are  ready  to  pour  millions  of  tons  of  grain  into 
the  cars  of  the  railroad,  as  soon  as  its  passenger  trains 
afford  an  opportunity  for  the  industrial  army  of  settlers 
to  make  war  upon  the  yet  primeval  wilderness.  The 
soil,  like  that  of  Minnesota,  can  be  brought  under  culti- 
vation with  remarkable  ease,  arid  is  so  peculiarly  adapted 
to  the  growth  of  wheat,  that,  probably  in  a  few  years, 
the  portion  of  the  United  States  and  the  British  Posses- 
sions, that  will  seek  shipment  for  its  grain  on  Lake  Supe- 
rior, will  be  the  great  wheat  granary  for  us  and  the 
people  of  Western  Europe.  The  prospect  thus  opened  is 
stimulating  the  Canadians  to  a  completion  and  vast 
enlargement  of  their  rival  works,  and  affords  valid 
reasons  why  we  should  strenuously  prepare  to  receive  a 
trade  which  it  is  in  our  power  to  secure,  but  which,  if 
once  lost,  we  may  never  be  able  to  regain. 

That  part  of  Lake  Superior  to  which  the  products  of 
this  vast  area  will  soon  be  brought  by  the  Northern 
Pacific  and  other  railroads  is,  by  water — the  cheapest 
of  all  methods  of  transportation — almost  as  near  the 
western  part  of  our  State  at  the  terminus  of  the  canal  at 
Buffalo,  as  it  is  to  Chicago.  From  Duluth,  the  depot  of 
the  road  on  Lake  Superior,  the  cost  of  carrying  freight 
by  water  to  Buffalo,  or  Oswego,  will  not  be  more  than 
one-third  of  the  cost  by  rail.  This  brings  the  subject 
closely  home  to  us  of  New  York. 

At  various  other  points  along  the  lower  lakes  are  rail- 
roads, carrying  grain  to  other  Atlantic  ports.  This 
State  alone  has  the  advantage  of  cheap  water  carriage 
from  the  lakes  to  the  ocean,  and  this  city  is  the  only 
place  on  the  Atlantic  to  which  trade  can  thus  be 
brought.  A  large  increase  of  trade  will  also  take  place 
from  Chicago  and  Milwaukee,  and  the  regions  tributary 
to  them;  but  this  part  of  the  subject  is  more  generally 


A   FREE   CANAL    POLICY.  311 

understood  than  that  I  have  endeavored  as  briefly  as  pos- 
sible to  describe. 

For  many  years  this  State  has  ceased  to  meet  its  obvi- 
ous interests  and  necessities  with  its  former  foresight  and 
vigor.  I  rejoice  that  under  the  influence  of  many  leading 
men  of  both  political  parties  there  is  reason  for  hoping  a 
wiser  policy  may  be  adopted,  in  view  of  the  fact  that, 
while  the  receipts  of  grain  and  flour  at  the  upper  lake 
ports  and  Montreal  have  enormously  increased  during  the 
last  ten  years,  those  of  our  own  city  have  diminished. 
They  were  less  in  1867  than  in  1860,  and  less  by  more 
than  nineteen  millions  of  bushels  in  the  last  two  years 
than  they  were  in  1861  and  1862. 

The  amount  of  tonnage  of  the  trade  we  are  permitting 
to  leave  us,  or  are  driving  away  by  the  joint  influence  of 
high  tolls  and  a  shallow  or  neglected  canal,  was  no  less 
than  6,442,225  tons  in  1868.  The  tonnage  of  all  the 
American  and  foreign  vessels  entered  and  cleared  in  this 
city,  to  and  from  foreign  ports,  in  the  same  year,  was 
5,109,722.  In  making  the  comparison,  the  figures  as  to 
the  canal  represent  the  actual  Dumber  of  tons  of  freight, 
while  those  of  the  foreign  trade  denote,  not  the  cargoes, 
but  the  size  of  the  vessels. 

It  is  shown  in  an  official  document,  recently  prepared 
by  Mr.  Nimmo,  Chief  of  the  Tonnage  Division  of  the 
Treasury  Department,  that  the  total  tonnage  of  all  the 
vessels  entered  last  year  at  New  York,  Boston,  Philadel- 
phia, Baltimore,  New  Orleans,  and  San  Francisco,  the  six 
principal  ports  in  the  United  States,  was,  in  the  year  just 
ended,  only  5,224,578,  being,  by  much  more  than  a  mil- 
lion tons,  less  than  the  actual  amount  of  the  commodities 
carried  on  the  Erie  Canal  in  the  same  year  and  exclu- 

isively  by  the  vessels  of  our  own  country. 
I  am  credibly  informed  that  if  the  canal  should  be 
enlarged  so  as  to  pass  vessels  of  600  tons,  and  permit  the 
substitution  of  the  illimitable  power  of  iron  and  steam 
for  that  of  the  comparatively  weak  muscles  of  horses, 
freight  might,  exclusive  of  tolls,  be  carried  at  a  living 
profit  over  the  canal  and  Hudson  from  the  lakes  to  New 
York  for  considerably  less  than  half  a  cent  a  ton  for  each 
mile,  and  that  the  total  cost  of  bringing  a  ton  of  grain 


312  A   FREE    CANAL   POLICY. 

from  Chicago  to  New  York  need  not  exceed  $3.75. 
Thus  we  should  give  the  grain  producers  of  our  country 
unprecedented  facilities  for  successful  competition  in  for- 
eign markets.  The  benefits  created  would  extend  to 
purchaser  and  consumer  everywhere.  There  can  be  no 
doubt  that  by  attracting  trade  through  a  judicious  and 
liberal  system  of  low  tolls,  the  revenue  directly  derived 
by  the  State  Treasury  itself  from  the  canal  would  be  far 
greater  than  if  we  continue  the  absurd  and  unbusiness- 
like policy  of  gradually  driving  trade  away  by  exorbi- 
tant charges.  By  the  better  policy  now  proposed  the 
commodities  brought  to  our  city  would  be  incalculably 
increased.  Their  transshipment  and  the  profit  in  buying 
and  selling  them  would  appertain  to  our  forwarders  and 
merchants,  and  give  employment  to  many  thousands  of 
our  people.  Where  the  productions  were  sold,  other 
articles  would  be  bought  in  exchange ;  and  there  is  no 
branch  of  industry  that  would  not  be  benefited. 

I  rejoice  to  know  that  the  interests  of  our  city  are 
those  of  the  Union  at  large,  and  that,  in  finding  or  mak- 
ing a  way  to  develop  the  natural  advantages  of  our  po- 
sition, we  not  only  benefit  ourselves  and  the  North- 
west, but,  by  increasing  profitable  shipments  of  our  pro 
ductions  to  other  countries,  enable  our  people  more 
easily  to  pay  interest  on  the  large  and  increasing  amount 
of  our  national  and  other  securities  held  in  Europe. 

The  canal  is,  both  locally  and  in  a  cosmopolitan  sense, 
an  important  division  of  that  yet  more  comprehensive  sub- 
ject, the  commercial  intercourse  which  is  materially  the 
main-spring  of  modern  triumphs  over  the  forces  of  nature, 
of  the  advancement  of  civilization,  and  the  increase  of 
human  welfare.  In  a  familiar  photograph  of  the  travel- 
ling and  carrying  system  of  his  time,  Shakespeare  pleas- 
antly suggests  how  recent  is  the  progress  of  our  race  on 
these  points.  We  remember  how  the  company  of  eight 
or  ten  persons  assembled  at  Gad's  Hill  and  travelled  to- 
gether for  protection  against  common  danger,  and  how,  of 
the  two  strictly  professional  carriers,  one  had,  on  his  soli- 
tary horse,  "  a  gammon  of  bacon  and  two  razes  of  ginger," 
and  the  other  "  had  turkeys  in  his  panniers."  Having 
thirty  miles  to  travel,  the  members  of  the  cavalcade  rose 


A   FKEE   CANAL   POLICY.  313 

at  two  in  the  morning  that  they  might  perform  the  jour- 
ney before  night.  In  those  days  not  only  was  there  no 
railway  and  no  canal,  but  even  good  wagon  roads  had  no 
existence.  When  estimating  what  the  future  will  be,  we 
properly  compare  the  past  with  the  present,  as  it  is  not 
only  in  Great  Britain  and  throughout  Europe,  but  in  this 
country,  a  wilderness  in  Shakespeare's  time.  Instead  of  a 
couple  of  carriers  owning  two  horses,  laden  with  one 
piece  of  bacon,  two  "  razes"  of  ginger,  and  half  a  dozen 
turkeys,  the  modern  substitutes  in  the  United  States 
alone  have  a  capital  measured  by  thousands  of  millions 
of  dollars,  and  their  traffic  is  estimated  to-be  worth  ten 
thousand  millions  of  dollars  annually. 

Such  facts  as  these  indicate  the  tendencies  of  an  era 
that  has  yet  by  no  means  arrived  at  its  climax.  Equally 
instructive  is  the  lesson  .  taught  by  the  various  great 
nations  of  antiquity,  such  as  Egypt,  Assyria,  Greece  and 
Rome,  which  arrived  at  a  high  degree  of  civilization,  but 
fell,  mainly  because  they  transferred  to  the  oppression 
and  plunder  of  other  nations  the  energy  which  would 
have  insured  their  prosperity  if  it  had  been  applied  to  the 
development  of  their  own  productiveness.  The  United 
States,  to  a  greater  extent  than  any  other  country,  either 
of  ancient  or  modern  times,  possess  alike  the  unprecedented 
appliances  of  modern  science  to  the  production  of  all 
that  is  desirable  for  the  material  welfare  of  man,  and 
unlimited  natural  resources  ;  and  no  limits  can  be 
assigned  to  our  progress,  if  to  a  sound  and  decisive 
policy  on  subjects  directly  financial,  commercial,  and 
educational,  we  add  due  attention  to  the  material  advan- 
tages obviously  within  our  reach. 


THE   END. 


INDEX. 


iltural  productions,  how  prices  in  are 
chiefly  regulated,  148,  189 ;  trade  with 
Canada  in,  93 ;  large  exports  from  United 
States  to  Canada,  140,  148. 

Alabama  claims,  the  fund  awarded  should 
be  distributed  in  good  faith,  227. 

Amnesty  bill,  at  variance  with  self-gov- 
ernment, 261,  202. 

Annexation,  true  policy  of  the  United 
States  as  to,  10'.». 

Arbitrament,  international,  a  substitute 
for  brute  force  and  the  horrors  of  war, 
234. 

Armaments  on  the  Great  Lakes,  89. 

Arrests,  sometimes  arbitrary  during  the 
war, 

Assay  office  in  New  York,  should  have 
right  of  coinage,  285  ;  amount  sent  by  it 
to  Philadelphia  for  coinage,  287 ;  work 
done  by,  291 ;  could  be  fitted  for  coinage 
at  small  cost,  291. 

Atrato  ship-canal,  its  great  importance  to 
the  commerce  of  the  United  States  and 
other  nations,  11, 132  ;  early  surveys  for, 
13  ;  saving  in  time  and  distance,  14,  29. 

Austria,  financial  experiments  of,  "Vien- 
nese tender,"  21(5. 

Balance  of  trade  with  Canada,  67,  69,  93 ; 
"  balance  of  trade  "  illustrated,  93,  95T 
140,  147;  with  Canada  for  several  years 
after  repeal  of  treaty  was  against  the 
United  States,  145;  old  theory  of  balance 
of  trade  exploded,  179. 

Banks,  how  forced  to  suspend  in  1861,  206, 

Srz. 

Banking,  on  resumption  of  specie  payments 
should  be  free,  219. 

Bankruptcies  unprecedented  in  number, 
214. 

Bankrupt  law,  its  importance  as  a  perma- 
nent act,  34,  54  ;  should  be  uniform,  34 ; 
encourages  integrity,  37;  is  in  accordance 
with  American  institutions,  39  ;  properly 
regulated,  is  a  necessary  part  of  every 
commercial  system,  40  ;  specially  needed 
in  the  United  States,  42 ;  is  no  untried 
theory,  57 ;  benefits  creditors,  47  ;  former 
laws  in  the  United  States,  49;  found 
beneficial  in  England,  France,  etc.,  39. 

Boston  Board  of  Trade,  recommends  nego- 
tiations for  free  trade  with  Canada,  151. 

Bright,  Hon.  John,  on  legitimate  develop- 
ment of  the  Monroe  doctrine,  119;  hia 
wishes  and  hopes  as  to  the  future  of 
America,  176. 


British  Islands,  value  of  their  real  and 
personal  property,  103;  levy  duties  on 
few  articles,  110,  114. 

British  North  American  Provinces,  our 
commercial  relations  with,  59;  impor- 
tance of  trade  with,  60,  68;  territorial 
extent  of,  64,  65  ;  balance  of  trade  with, 
67 ;  relations  of  the  provinces  to  each 
other  and  their  separate  tariffs  in  1864, 
70 ;  population  of  each  province,  127, 128 ; 
free  exchange  with,  would  benefit  both 
countries,  72,  81 ;  statistics  of  trade 
with,  74. 

Bull  Run,  battle  of,  dissolved  many  delu- 
sions, 206. 

Canada,  population  of,  its  number  and 
character,  129  ;  trade  with  tropical  coun- 
tries, 131 ;  extent  of  her  commercial  ma- 
rine, 133,  159  ;  means  of  communication, 
129  ;  obstacles  to  trade  with,  138 ;  govern- 
ment and  people  anxious  to  negotiate 
in  a  friendly  spirit,  121,156,  172;  extc-nt 
of,  compared  with  that  of  our  own  states, 
158;  commercial  isolation  of,  injurious, 
158;  rate  of  wages  in,  159;  chiefly  a  forest 
and  farming  country,  160 ;  contrasted  with 
the  Hawaiian  Islands,  164  ;  importance  as 
a  military  power,  168 ;  trade  with,  in 
1874  and  1875,  170;  a  just  treaty  with, 
would  promote  the  best  principles  of  in- 
ternational good -will,  170;  the  sound 
policy  towards  her  people,  177,  178;  as  a 
province  in  1864,  70 ;  now  charges  same 
duties  on  manufactures  from  all  coun- 
tries, 83 ;  trade  with  the  United  States 
greater  than  with  all  other  countries 
added  together,  94  ;  extent,  area,  and  cli- 
mate, 125 ;  extent  of  North-western 
Canada,  125,  126 ; 

Canadian  Government  promises  fullest  con- 
sideration to  proposals  for  closer  com- 
mercial relations  with  the  United  States, 
173 ;  tariff  now  admits  free  of  duty  near- 
ly all  so  admitted  under  the  former 
treaty,  173  ;  general  moderation  of  pres- 
ent tariff,  138. 

Canals,  ancient  and  modern,  12;  magni- 
tude of  the  Erie  Canal  (see  Erie  Canal), 
12 ;  projected  across  the  Isthmus  of  I)a- 
rien  (see  Darien),  14,  30.'} ;  canals  and  nat- 
ural water-courses,  their  value  for  car- 
riage of  heavy  freight,  303. 

Carrying  interests  of  the  United  States  re- 
quire mutually  free  transit  with  Canada, 
140. 


316 


INDEX. 


Centralization  contrary  to  truly  republican 

government,  275. 
Central  America,  extension  of  trade  with, 

119. 

Central  States,  their  interest  in  trade  be- 
tween Canada  and  Mexico,  131. 
Chase,  Hon.  Salmon  P.,  reply  to  when  Sec- 
retary of  the  Treasury,  1 85, 18(5,  188, 199. 
Chamber  of  Commerce  of  New  York  de- 
sires removal  of  hindrances  to  trade  with 
Canada,  150. 

Chicago,  her   board  of  trade  desires  nego- 
tions  for  closer  business  relations  with 
Canada,  151 ;  her  interest  in  trade  with 
Canada  and  Mexico,  163. 
China,  small  amount  of  our  exports  to,  134. 
Chipo  route  across  the  isthmus,  18. 
Cincinnati  Convention,  resolutions    as    to 

slavery,  239. 

Circulation,   monetary,    alarming  increase 
of,  199 ;  of  the  banks,  198 ;  disastrous  re- 
sults of  sudden  expansion  of,  198. 
Circulating  medium,  changes  in,  44. 
Clay,  Henry,  on  reciprocal  trade  with  Can- 
ada, 132. 

Coal,  free  exchanges  of  with  Canada  would 
save  both  countries  the  cost  of  carrying 
for  hundred  of  miles,  78,  97 ;  labor-sav- 
ing and  should  be  free  of  duty,  97 ;  mu- 
tual exchanges  with  Canada,  148. 
Cobden  Richard,  his  initiation  of  a  treaty 

with  France,  169. 

Coinage  in  New  York,  demanded  by  jus- 
tice and  economy,  285,  292  ;  would  aid  in 
restoring    specie    payments,    286,    288  ; 
urged  by  leading  statesmen  from  various 
states,  288  ;  reasons  why  delayed,  291. 
Colonial  privileges   in   Great   Britain  an- 
nulled, 83,  89 ;  rights  compromised,  94 ; 
restrictions  passed  away,  173. 
Color-line,    political,   must  be   destroyed, 

275. 

Commercial  union  and  mutual  rights  of 
transit  important  to  the  United  States 
and  Canada,  140 ;  isolation,  one  party 
may  suffer  more  than  another,  but  both 
are  injured,  83;  intercourse,  beneficial 
political  results  of,  1^0 ;  relations,  natu- 
ral, in  the  main  immutable,  123. 
Commerce  through  the  Union  gives  life  to 
industry  in  every  state,  35 ;  its  hazards, 
40 ;  as  a  source  of  strength  in  war  and 
peace,  114;  views  of  early  American 
statesmen  as  to,  156  ;  has  long  been  ne- 
glected by  our  legislators,  296. 
Commissioners  to  negotiate  a  commercia 
treaty  with  Canada,  137  ;  appointment  of 
recommended,  59,  86,  98,  99;  recom- 
mended by  the  Legislature  of  New  York, 
136,  151 ;  and  by  chief  commercial  bodies 
throughout  the  United  States  and  Cana- 
da, 151,  154,  160,  173. 

Commission  of  bankers  and  merchants,  to 
devise  a  financial  plan  during  the  war,  re- 
commended, 204. 
Conduct  of  the   war,  true  policy   of    the 

government  as  to,  256. 

Connecticut  money,  how  it  became  worth- 
less, 195. 
Contraction  of  currency  indispensable,  224 ; 


should  be  so  gradual  as  not  to  provoke 
reaction,  224,  225. 

Continental  or  American  system  of  trade, 
130 ;  our  duty  to  lead,  the  way  is  open, 
182;  continental  money,  its  decline,  195. 

Convention  of  1818  with  Great  Britain,  61  ; 
opinions  of  Daniel  Webster  on,  62. 

Cotton  manufactures,  sales  to  Canada  136, 
167. 

Corn  laws,  British,  their  Tepeal  a  triumph 
of  public  liberty,  79. 

uba,  extension  of  trade  with  desirable, 
120,  130;  present  unsatisfactory  condi- 
tion of  trade  with,  120 ;  former  arrange- 
ments for  extended  trade,  120 ;  wishes  of 
her  people  for  freer  intercourse  with  the 
United  States,  121. 

Darien,  canal  across  isthmus  of,  16 ;  sur- 
veys by  different  governments,  18;  in- 
terest taken  by  different  nations,  20,  22 ; 
canal  across  would  aid  in  maintaining 
supremacy  of  the  United  States,  23 ; 
tables  showing  savings  to  the  United 
States,  23  ;  showing  how  soon  the  cost 
would  be  repaid,  23,  27 ;  cosmopolitan  as 
to  its  results,  and  should  be  international 
in  character,  32;  cost  repaid  by  France 
and  England,  23,  24 ;  value  to  New  Eng- 
land and  coasting  vessels,  30;  how  gov- 
ernment should  aid,  26. 

Debtors,  ancient  treatment  of,  41 ;  if  up- 
right, should  be  permitted  to  begin  the 
world  anew,  39,  51  ;  how  demoralized  by 
oppressive  laws,  47. 

Debasement  of  the  currency,  a  favorite 
resort  of  short-sighted  statesmen,  196. 

Democrats,  their  traditional  policy  is  for 
sound  money,  220. 

Destitution  prevalent  and  disregarded, 
171. 

De  Tocqueville,  the  first  notion  is  that  of 
violence,  that  of  persuasion  is  derived 
from  experience,  82. 

Divide  and  conquer,  the  favorite  game  of 
oppressors,  275. 

Dominion,  Governor-General  and  other 
official  authorities  promise  the  fullest 
consideration  to  proposals  for  commer- 
cial treaty  with  the  United  States,  151 ; 
Board  of  Trade  is  anxious  to  deal  liber- 
ally, etc.,  151;  but  thinks  extension  of 
trade  should  be  first  proposed  by  the 
United  States,  172. 

Embarrassments  of  Trade  in  1876,  124. 

i  England,  commercial  treaty  with  France, 
its  origin  and  beneficial  results,  169,  170; 
Bank  of  England,  its  financial  experi- 
ence, 214,  215. 

|  Erie  Canal,  its  importance  to  New  York 
and  the  nation,  12,  303  ;  injurious  and  un- 
justifiable neglect  of,  304 ;  it  reduced  cost 
of  freight  marvelously,  306 ;  its  enlarge- 
ment desirable,  308,  311 ;  expenditures, 
income,  and  results  of,  309 ;  a  cause  of 
preponderance  of  northern  power,  309 ;  a 
free  canal  policy  essential,  302,  312. 
Error,  the  great  financial,  of  the  govern- 
ment, 208. 


INDEX. 


31 


Jverett,  Hon.  Edward,  nothing  is  to  be 
gained  by  a  war  of  tariffs,  69. 

]xchan-c  ,',]'  products  of  industry,  118. 

ixports  to  Canada,  increase  under  former 
treaty,  OS,  9-  ;  from  the  United  States, 
larger  than  to  any  other  country,  except 
•  liritam,  Germany,  and  i'rancr, 
l:>l  ;  are  much  underrated,  184;  in  1876, 
107;  amounts  of  are  insufficiently  re- 
ported, 167. 

Sxperience  teaches  successive  generations, 
etc.,  1J14,  L'T-J. 

Extension  and  freedom  of  trade  over  the 
American  Continent,  120. 

Failures,  number  in  various  years,  38,  52, 
;  liability  to,  40. 

Favoritism,  needless  increase  of  employees, 
290. 

Financial  condition  of  the  nation,  183; 
problem — how  shall  it  be  solved  ?  205  ; 
history  of  tho  United  States  since  the  war 
began,  205,  2JO ;  errors  from  mistaken 
views  of  the  war,  206  ;  policy  of  delusion 
of  the  people  adopted,  206. 

Finance,  its  laws  as  sure  as  those  of  arith- 
metic or  gravitation,  194,  214 ;  estab- 
lished axioms  of,  215V  216  ;  experience  of 
the  United  States  and  Canada,  217. 

Fire,  losses  by,  in  Boston  and  Chicago, 
213. 

Fisheries,  value  of  Canadian  to  New  Eng- 
land and  the  nation.,  6U;  their  extent, 
61  ;  prospect  of  war  as  to,  62. 

Flattery  of  the  people  injures  a  just  cause, 
265. 

Food  and  fuel  should  be  supplied  at  lowest 
practicable  cost  and  not  taxed,  161. 

France,  her  occupation  of  Mexico,  117; 
her  commercial  treaty  with  England,  its 
origin  and  beneficial  results,  100,  170; 
recent  financial  course  sketched  and  re- 
commended, 209,  210 ;  her  course  the  re- 
verse of  ours,  211  ;  wise  policy  of  the 
Bank  of  France,  210;  former  deprecia- 
tion of  currency  in  France,  210. 

Free  ports  in  Canada  in  1804,  98 ;  canal 
policy,  the  best  guarantee  for  the  pre- 
servation and  increase  of  our  inland 
commerce  (see  Erie  Canal),  302. 

French  assignats,  how  they  were  refused 
in  making  new  bargains,  194 ;  became 
worthless,  195. 

Frontier,  northern,  its  commercial  in- 
terests, C4. 

Geneva  award,  distribution  of,  226 ;  claims 
of  insurance  companies  as  to  award,  2  JO, 
2  J?  ;  confidence  officially  invited  and  in- 
terposition promised,  227 ;  decisions  of 
the  tribunal,  229 ;  receipt  of  money  by 
the  United  States,  230  ;  judiciary  commit- 
tee advises  improperly,  231  j  perversion 
of  funds  a  dangerous  precedent,  233 ; 
duty  of  the  government, 
lad.-tone,  Hon.W.  E.,  on  the  fate  of  trans- 
atlantic possessions,  177. 

Gold  bill,  its  bad  effects  and  quick  repeal, 
ll>8;  repealed  in  fifteen  days  aft  r  its 
passage,  209  ;  the  rise  of  gold  illustrated, 
197 ;  gold  the  standard  of  value,  318. 


« 

n. 


Grant,  President,  pledges  himself  and  Con- 
gress to  specie  payments,  :. 

Grain  trade  with  Canada  one  of  re-exporta- 
tion, 146  ;  how  prices  are  controlled,  146. 

Great  Lakes,  as  means  of  communication, 

ISA 

Great  Britain,  her  bankrupt  laws,  41 ;  pro- 
gress in  liberty,  78;  modern  colonial 
policy  of,  173  ;  former  oppressive  policy, 
174  ;  views  of  the  Alabama  claims,  228 ; 
on  the  rights  of  underwriters,  230. 

Hawaiian  Islands,  treaty  with,  112;  impor- 
tant as  harbors  and  naval  stations,  116; 
should  not  pass  into  the  hands  of  any 
foreign  power,  117 ;  treaty  with,  a  pre- 
cursor of  more  extended  measures,  123, 
169. 

Healing  power  of  the  political  and  social 
body,  87. 

Home  markets,  value  of,  133. 

Honduras,  route  across  the  isthmus,  16. 

Hudson  river,  its  scenery  and  associations, 
249. 

Humboldt,  Baron,  on  the  inter-oceanic 
canal,  19. 

Immigration,  serious  diminution  of,  171. 

Imports  from  Canada,  66 ;  increase  under 
former  treaty,  68;  the  simplest  neces- 
saries of  life,  92. 

India,  great  value  of  trade  with,  14. 

Industrial  army,  on  it  the  existence  of  the 
army  and  navy  and  all  classes  of  society 
depends,  93. 

Independence,  Canadian,  assertion  of,  174 ; 
of  the  United  States,  its  effect  on  Great 
Britain,  175;  colonial,  98. 

Inflation,  injurious  results  of,  188;  example 
of  the  Government  followed  by  the  banks, 
191 ;  painf  ully  felt  in  the  home  of  the  lubor- 
or,  192 ;  increased  enormously  the  national 
debt,  192 ;  may  benefit  the  speculator, 
but  despoils  the  masses,  193 ;  continued 
until  its  fruits  were  palpable,  208;  in- 
duces speculation  and  panics,  213 ;  creates 
delusive  hopes,  214  ;  futility  of,  2'J2  ;  no 
longer  inflates,  223. 

Insolvency,  unexpected  and  political  causes 
of,  45 ;  average  among  business  men,  40  ; 
laws  in  various  states,  51. 

International  law,  the  greatest  is  that  of 
the  mutual  interest  of  mankind,  S2. 

Interest,  unpreceJentedly  low  rate  of,  222. 

Iron  and  steel  manufactures,  large  sales  of 
to  Canada,  136,  167.  . 

Jefferson,  Thomas,  on  hard  money,  195. 

Kansas,  her  admission  as  a  ttate,  236,  288 ; 

organization  as  a  territory, 
Kelley,  Frederick  M.,  on  canal  across  the 

Isthmus,  19. 

Labor,  often  in  vain  through  obstructive 
laws,  97 ;  how  to  relieve  present  condition 
of,  i 

Labrador,  resources  and  climate,  128. 

Land  grants,  enormous  extent  of,  under 
Republican  administration,  296. 


318 


INDEX. 


Lecompton  Constitution,  244 ;  confirmed 
power  to  change  form  of  government, 

Legal  tender,  an  unsound  system  of 
finance,  ]  84  ;  absurdities  of  its  advocates 
exposed,  189  ;  depreciated  national  securi- 
ties, and  forced  the  government  to  pay 
high  prices,  1(52,  199;  arbitrarily  changed 
relations  of  debtor  and  creditor,  192 ; 
lesssned  the  vigilance  which  prevents 
frauds,  203  ;  when  and  why  initiated,  207 ; 
unprecedented  distinction  made  between 
it  and  specie  by  government,  207  ; 
strange  and  fatal  error  as  to,  208;  un- 
stable, 218 ;  when  withdrawn,  no  more 
must  be  issued,  219. 

Lincoln,  President,  in  his  first  message 
tendered  sound  advice,  202 ;  why  his 
proclamation  of  amnesty  was  unsatisfac- 
tory, 260 ;  assurances  given  through  Gov- 
ernor Stanley,  263 ;  Lincoln  desired  peace, 
263. 

Loans  and  discount,  fluctuations  in,  43. 

Local  self-government  and  the  constitution, 
275. 

Making  money  abundant,  fallacy  of,  199. 

Manitoba,  its  climate  and  resources,  126, 
159. 

Manifest  destiny,  how  to  be  consummated, 
118. 

Manufactures,  sales  of,  to  Canada,  134, 135, 
167;  might  be  largely  increased,  136; 
few  imported  from  Canada,  73. 

Markets,  needed  extension  of,  for  our  pro- 
ductions, 156. 

Marine  insurance,  some  settled  principles 
of,  230,  231. 

Maritime  provinces,  population  in  1874,  70 ; 
their  extent  and  resources,  etc.,  125. 

Maryland,  interested  in  Canadian  trade, 
162,  167. 

Material  interests,  long  neglected  by  the 
Government,  171. 

Mexico,  French  occupation  of,  117  ;  exten- 
sion of  trade  with,  119,  125  ;  population 
and  trade  of,  121,  122 ;  value  of  a  com- 
mercial treaty  with,  122,  130  ;  railroads 
in,  121,  122  ;  pur  relations  with,  59. 

Military  despotism  in  the  South  must  in- 
jure the  whole  Union,  298. 

Mint,  the  director  of,  on  coinage  in  New 
York,  292. 

Monroe  doctrine,  implies  duties  as  well  as 
rights,  169 ;  has  approved  itself  to  both 
continents,  117  ;  a  barren  ideality  unless 
associated  with  friendly  care  for  other 
American  states,  118;  creates  obliga- 
tions, 118. 

Municipal  matters,  local  right  to  deter- 
mine, 251. 

National  Board  of  Trade,  petitioned  Con- 
gress in  favor  of  trade  with  Canada,  150, 
163. 

National  debt,  needlessly  increased,  208  ; 
injuries,  few  greater  than  the  persistent 
assertion  of  delusive  statements,  (.»2. 

Nationality  of  the  Democratic  party,  236, 
254. 


I  Nature,  the  gratuities  of,  96. 
Neglect  of    commerce    by    the    party  in 

power,  161. 
New  Brunswick,  its  area  and  population, 

127,  159. 

New    England,    views    as    to    trade  with 

Canada,   161,  162;  benefit  to  be  gained 

by  a  commercial  treaty  with  Mexico,  122. 

j  Newfoundland,  area,   climate,  trade,  etc., 

j  New  York,  resolutions  of  State  on  trade 
with  Canada,  36,  59,  1L;6  ;  the  commer- 
cial centre  of  the  Union,  186,  289  ;  the 
chief  commercial  city,  237  ;  change  in 
constitution  of  the  State,  247  ;  necessity 
of  coinage  in,  287  ;  shipping  commission 
of,  281  ;  assay  office  in,  285  ;  imports 
and  exports  of  same,  289  ;  natural  depot 
of  the  precious  metals,  291  ;  and  the 
national  shipping  trade,  296  ;  the  mone- 
tary centre  of  the  Union,  290  ;  natural 
causes  of  its  greatness,  302,  304  ;  trade 
with  the  West  must  be  maintained  by  a 
free  canal  policy,  302. 

North  and  South,  permanent  system  of  ex- 
changes between,  130. 

North-west,  its  climate,  extent,  and  re- 
sources, 125,  310. 

Nova  Scotia,  its  area,  population,  etc.,  127, 


Ontario  and  Quebec,  formerly  known  as 
Canada,  128  ;  area  and  resources,  128. 

Panama  route  from  ocean  to  ocean,  18. 
Paper  money,  the  spectral  doctrine  of,  100  ; 

injurious  effect  on  the  national  debt,  101  ; 

dollar  should  have  been  kept  as  near  par 

as  possible,  209. 
Parliament,     British,    passed  a  gold  bill 

in  1814,  215  ;  investigated  financial  prin- 

ciples, 216.  t 

Parties,  comparison  of  the  Democratic  and 

Republican,  297  ;  integrity  in  public  af- 

fairs the  leading  question,  293. 
Peel,  Sir  Robert,  on  severing  his  party  ties, 

Pennsylvania,   interested  in  extension  of 

trade   with  Mexico   and  Cuba,  123  ;  her 
•  interests  as  to  Canada,  162,  163. 
Policy,  the  best,  to.  the  South,  273,  275,  298. 
Preferential  duties  in  favor  of  colonies,  re- 

pealed by  Great  Britain,  63. 
Preservation  of  the  Union  essential,  256. 
Principles  and  policy  of  the  Democratic 

party,  273. 
Prince  Edward's  Island,  area  and  climate. 

127. 
Prosperity,  cannot  be  secure  with  legalized 

but  irredeemable  currency,  196. 
Protection  to  home  industry,  by  permitting 

it    to    obtain    its    best    results,  82  ;    in 

Canada,  72,  83  ;  so  called  sometimes  in- 

jurious and  pernicious,  146. 
Protectionists,  earnestly  advocate  recipro- 

city with  Canada,  163. 
Prussia,  the  commercial  policy  it  success- 

fully pursued,  140. 
Public  money,  influence  of  those  interested 

in  its  expenditures,  201. 


INDEX. 


319 


Questions  of  the  times  in  1870,  293,  301. 

Railroads,    their  value  and    history,   12; 
mania  for  construction  of,  212;   i 
of  those  in  the  Stati-  of  New  York,  :H>4. 

Reaction,  financial,  and  consequent  dis- 
tress, '.'12. 

Real  estate,  how  affected  in  panics,  50. 

Rebel  lion,  must  be  subdued,  35;   has   its  i 
victims  in  the  ranks  of   commerce,   30; 
was  unexpected  and  misunderstood,  2(>:» ; 
false  prophecies  as  to,  205. 

Receipts  and  disbursements  of  the  govern- 
ment, motion    for    frequent   statements  , 
of,  201. 

Reciprocity  with  British  North  American 
Provinces,  5'.» ;    naturally  beneficial  ef-  I 
feet  of,  66 ;  complication  of,    with  the  | 
fishery  question,  64 ;  to  be  regarded  na-  , 
tionally,  not  locally,  (54 ;  as  to  the  fish-  | 
cries,  03  ;  operations  of,  66  ;  character  of  I 
imports  from  Canada,   00,  78 ;  increase  , 
of  trade  under  the  treaty,  08;  opinions 
of  American  statesmen  in  favor  of,  85 ; 
illustrated,  80,  87  ;  discussed  in  Congress, 
138. 

Reduction  of  taxation  by  the  Democrats, 
297. 

Reformation  necessary  in  the  government, 
27::, 

Republican  party — its  broken  pledges,  295. 

Resolutions  of  the  State  of  New  York  on 
trade  with  Canada,  59,  65,  86,  136. 

Retaliation  alone,  never  the  policy  of  a 
true  statesman. 

Revulsion,  commercial,  in  1837  and  1857,  37. 

San  Miguel,  route  from  ocean  to  ocean,  18. 
Secession  must  be  put  down  at  any  cost, 

257;    implies    perpetual    disintegration, 

114,  207. 
Sectional  excitement,  full  of  danger,  287, 

Self-government  on  trial  in  the  war,  267. 

Ship-canal  between  Atlantic  and  Pacific 
oceans,  110. 

Shipping  oi  the  United  States,  how  reduced, 
114;  act  relating  to  merchant  seamen, 
its  objects  and  results,  277;  needea 
reform  of  abuse?,  -J17,  2M  ;  commission- 
ers should  be  appointed  by  central  power, 

Simplification  of  tariff,  110. 

Slavery  in  Kansas,  unnatural  and  tempo- 
rary, 247  ;  prohibited  by  the  laws  of  soil 
and  climate,  2*>  1  ;  swept  away  throughout 
the  Union  as  the  armies  progress. 

Sinu^'lin^,  h<.\v  r.  i'ar  led  and  prevented, 
98  ;  how  to  diminish,  155  ;  from  Canada, 
181. 

South,  best  policy  towards,  273  ;  impor- 
tance of  its  prosperity,  '.'74  ;  increase  in 
its  debts.  274 ;  should  be  treated  justly 
and  constitutionally. 

Southern  States,  indobtochlMI  at  beginning 
of  the  war,  3s  ;  iml,  btedness  in  January, 
1870,  274  ;  impoverishment  in  ten  years, 
274  ;  people  misrepresented  in  Congress, 
298. 

Spain,    arrangements   for  extensive  trade 


between  the  United  States  and  Cuba, 
120;  value  of  a  treaty  for  tradi:  with 
Cuba,  1.'.'. 

Specie  payments,  should  be  approached 
gradually,  so  as  to  avoid  reaction,  299. 

Speculation  disastrously  stimulated  by  ex- 
pansion of  the  currency,  199. 

Standard  of  value,  necessity  of,  217 ;  fluc- 
tuations pernicious,  217. 

Stanley,  Governor,  officially  asserted  the 
administration  wanted  only  peace,  263. 

Statistics,  Bureau  of,  showing  returns  of 
our  exports  to  Canada,  i:;.r>. 

St.  Lawrence  River,  impassable  nearly  half 
the  year,  70 ;  as  a  route  for  shipping,  95 ; 
circuitous  route  for  tropical  productions, 
97 ;  its  value  to  the  United  States,  79, 
80,  95,  97,  147,  163,  305,  307. 

St.  Louis,  a  commercial  centre  under  a  con- 
tinental system  of  trade,  163. 

Tariff,  former,  in  Canada, 71 ;  injurious  in- 
fluence on  importations  from  the  United 
States,  71  ;  compared  with  tariff  of  Uni- 
ted States,  72 ;  a  practical  discrimination 
against  our  Atlantic  cities,  74 ;  colonial 
tariff  made  by  the  colonists  themselves, 
94;  former  increase  in  Canadian,  96; 
tariff  of  the  United  States,  100 ;  should 
yield  the  largest  revenue  with  the  least 
inconvenience  to  the  people,  101,  103; 
proper  objects  of,  111;  the  sixty  day 
tariff,  105;  tariff  of  Great  Britain,  110; 
effects  of  United  States  tariff  illustrated, 
114;  our  own  laws  drive  trade  from  us, 
146,  162 ;  Canadian,  some  effects  of,  145, 
180 ;  many  of  its  duties  on  our  manufac- 
tures nearly  nominal,  152 ;  moderate 
duties  on  silk,  etc.,  153. 

Taxation,  if  injudicious,  impoverishes  the 
people  and  diminishes  revenue,  96 ;  the 
principles  of,  100,  101,  110;  arbitrary, 
107;  further  taxation  for  the  benefit  ot 
few  should  be  discontinued,  113;  cannot 
be  shifted  to  other  people,  149 ;  national, 
of  the  banks,  impolitic,  203 ;  injuriously 
deferred  during  the  war,  201 ;  prompt 
taxation  evaded  and  specious  flattery 
substituted,  207 ;  pressure  on  the  labor- 
ing classes,  270. 

Tehu  an  tepee,  route  for  a  ship-canal,  16. 

Thiers,  M.,  on  the  fate  of  false  financiering, 
202. 

Timber,  should  be  admitted  free  of  duty, 
70;  our  exports  of  it,  70;  oppressive 
duties  cause  spendthrift  exhaustion  of 
the  supply,  149 ;  rapid  destruction  of  our 
forests,  150;  importance  of  abundant 
supply,  150. 

Topeka.  constitution  framed  at,  244. 

Transit,  main  natural  lines  in  North  Amer- 
ica 305 ;  by  water,  can  be  extended  far 
inland,  307;  what  it  was  in  the  olden 
time. 

Treaty,  commercial,  with  Hawaiian  Islands, 
the  advantages  it  confers  yield  also 
advantages  to  ourselves,  1 13 ;  may  reduce 
revenue  on  certain  articles,  but  tend  to 
promote  it  on  others,  1 14 ;  less  important 
than  treaty  with  Canada,  119. 


320 


INDEX. 


United  States,  interest  in  canal  between 
Atlantic  and  Pacific  oceans,  16,  23; 
should  seek  commercial  rather  than 
political  annexations,  169;  commercial 
relations  with  British  North  American 
provinces,  59 ;  naturally  more  intimate 
than  those  of  most  of  the  States  with 
each  other,  129 ;  our  exports  to  Canada 
ninety  times  as  large  as  to  the  Hawaiian 
Islands,  152 ;  small  exports  to  China,  184 ; 
interest  in  a  continental  system  of  trade, 
140 ;  expected  to  lead  the  way,  182 ;  the 
great  financial  error  of  the  Government, 
208;  financial  history  since  the  war  be- 
gan, 205,  206;  treaty  with  Hawaiian 
Islands,  112;  local  self-government  and 
the  constitution,  275  ;  should  discharge 
duties  implied  in  Monroe  doctrine,  169 ; 
the  Union  essential,  256 ;  ratio  of  increase 
in  population,  303 ;  no  limits  can  be  as- 
signed to  their  progress,  313. 

Value,  commercial,  is  mainly  the  price  in 

the  markets  of  the  world,  189. 
Van  Buren,  Martin,  on  commercial  policy 

of  the  United  States,  132. 
Virginian  paper  money,  its  decline  and  fall, 

195. 


Wages  and  salaries,  how  reduced  by  legal 
tenders,  193. 

War,  magnitude  of  the  late  war  in  the  Uni- 
ted States,  102  ;  its  effect  on  the  laboring 
population,  104;  the  stupendous  errors 
as  to  its  duration,  etc.,  206 ;  magna- 
nimity sometimes  the  truest  wisdom,  260 ; 
proper  objects  of  the  war,  261  ;  passion 
for  war  soon  exhausts  itself,  264. 

Washington,  he  foresaw  and  foretold  the 
greatness  of  New  York,  305. 

Webster,  Daniel,  on  fishing  rights  of  the 
United  States,  62;  on  the  rights  of 
underwriters,  230. 

Wheat  and -flour  trade,  with  Canada,  one 
rather  of  transportation  than  consump- 
tion, 74 ;  how  far  north  wheat  may  be 
grown,  126  ;  our  trade  in,  with  Canada, 
179. 

Whig  party,  was  a  worthy  foe,  253. 

Zollvere;n,  or  German  customs-union,  140  ; 
origin  and  history  of,  141,  1 42  ;  principles 
and  progress  of,  141,  143,  154;  modified 
form  applicable  to  trade  "between  United 
States  and  Canada,  144;  suggested  be- 
tween Great  Britain  and  Canada,  154. 


